The dollar index (DXY00) rose to a 1-week high on Tuesday and finished up by +0.18%. The dollar found support Tuesday from better-than-expected US economic news on home prices and the Dec MNI Chicago PMI. Also, higher T-note yields on Tuesday have strengthened the dollar’s interest rate differentials. The dollar extended its gains Tuesday afternoon from the slightly hawkish minutes of the December 9-10 FOMC meeting.
Questions about the Fed’s independence are limiting gains in the dollar after President Trump said Monday evening that he “still might” fire Fed Chair Powell. Also, strength in the Chinese yuan is undercutting the dollar after the yuan rallied to a 2.5-year high on Tuesday.
