The dollar index (DXY00) on Friday fell by -0.06%. The dollar on Friday posted modest losses. Weaker than expected U.S. economic news on Aug personal spending and Sep MNI Chicago PMI weighed on the dollar. Also, dovish U.S. inflation news Friday knocked T-note yields lower and weighed on the dollar after the Aug PCE core deflator rose at the slowest pace in two years. The dollar recovered most of its losses after stocks gave up early gains and turned lower when New York Fed President Williams said the Fed may have to keep rates restrictive for “some time.”
Friday’s U.S. economic news was mostly weaker than expected and bearish for the dollar. Aug personal spending rose +0.4% m/m, weaker than expectations of +0.5% m/m. Also, the Sep MNI Chicago PMI fell -4.6 to 44.1, weaker than expectations of 47.6. In addition, the Aug PCE core deflator eased to +3.9% y/y from +4.3% y/y in July, right on expectations and the slowest pace of increase in 2 years, which is dovish for Fed policy.
