The dollar index (DXY00) on Wednesday rose by +0.31%. The dollar found support from weaker-than-expected German and UK inflation reports, which knocked European government bond yields lower and weakened the euro relative to the dollar. Gains in the dollar accelerated on the stronger-than-expected U.S. existing home sales and consumer confidence reports. The dollar extended its gains Wednesday afternoon as stocks turned lower, boosting liquidity demand for the dollar.
Wednesday’s U.S. economic news was better than expected and supported the dollar. Nov existing home sales unexpectedly rose +0.8% m/m to 3.82 million, stronger than expectations of a decline to 3.78 million. Also, the Conference Board U.S. Dec consumer confidence index rose +9.7 to a 5-month high of 110.7, stronger than expectations of 104.5.
