The dollar index (DXY00) rose by +0.41% on Wednesday, just below Monday’s 1.5-year high. Higher T-note yields on Wednesday strengthened the dollar’s interest rate differentials as the 10-year T-note yield rose to a 24-year high of 5.36%. Also, hawkish minutes from the September 15-16 FOMC meeting supported the dollar.
The dollar fell back from its best level on Wednesday after US Aug consumer credit rose less than expected. The dollar also came under pressure after crude oil prices erased an early rally and fell sharply. The weaker crude prices eased inflation expectations that could prompt the Fed to tighten monetary policy, which supports the dollar.
