The dollar index (DXY00) rose by +0.24% on Tuesday. The dollar rose on Tuesday amid weakness in stocks, boosting liquidity demand for the currency. Also, higher crude oil prices on Tuesday pushed up inflation expectations and could persuade the Fed to keep monetary policy tight, a supportive factor for the dollar. In addition, hawkish comments from New York Fed President John Williams were supportive of the dollar, as he said inflation remains quite high. The dollar fell from its best level on Tuesday after the US May trade deficit widened to a 14-month high.
The US May trade deficit widened to -$77.6 billion, the largest deficit in 14 months and a negative factor for Q2 GDP.