The dollar index (DXY00) today is up by +0.26%. The dollar today is moderately higher on concern that escalation of the trade war will boost inflation and keep Fed policy restrictive after US tariffs on steel and aluminum went into effect and the EU and Canada retaliated by imposing tariffs on some US goods. Gains in the dollar were limited after US Feb CPI rose less than expected, a dovish factor for Fed policy.
US Feb CPI rose +0.2% m/m and +2.8% y/y, weaker than expectations of +0.3% /m and +2.9% y/y. Feb CPI ex-food and energy rose +0.2% m/m and +3.1% y/y, weaker than expectations of +0.3% m/m and +3.2% y/y, with the +3.1% y/y gain the smallest year-on-year increase in 3-3/4 years.
