The dollar index (DXY00) on Wednesday fell by -0.04% and posted a 2-week low. Wednesday’s decline in bond yields undercut the dollar as the 10-year T-note yield fell to a 2-week low. Also, strength in stocks curbed liquidity demand for the dollar. Losses in the dollar were limited after U.S. Sep PPI rose more than expected, a hawkish factor for Fed policy. Also, the Sep 19-20 FOMC meeting minutes were slightly hawkish and bullish for the dollar.
Wednesday’s U.S. producer price report was stronger than expected and bullish for the dollar. Sep PPI final demand rose +0.5% m/m and +2.2% y/y, stronger than expectations of +0.2% m/m and +1.6% y/y. Also, Sep PPI ex-food and energy rose +0.3% m/m and +2.7% y/y, stronger than expectations of +0.2% m/m and +2.3% y/y.
