The dollar index (DXY00) today is up by +0.07% at a 2-1/2 week high. The dollar is supported by today’s news of an unexpected increase in the US Nov import price index ex-petroleum, a hawkish factor for Fed policy. The dollar is also seeing support from stronger interest rate differentials with today’s rise in the 10-year T-note yield to a 2-1/2 week high.
Strength in stocks today has reduced liquidity demand for the dollar. The dollar is also being undercut by expectations that the Fed will cut interest rates by -25 bp at next week’s FOMC meeting.
