The dollar index (DXY00) on Wednesday rose by +0.34%. Stronger-than-expected U.S. economic news Wednesday on weekly jobless claims and University of Michigan U.S. Nov consumer sentiment and inflation expectations supported moderate gains in the dollar. Also, higher T-note yields on Wednesday strengthened the dollar’s interest rate differentials.
U.S. economic news Wednesday was mostly better than expected and bullish for the dollar. Weekly initial unemployment claims fell -24,000 to a 5-week low of 209,000, showing a stronger labor market than expectations of 227,000. Also, the University of Michigan U.S. Nov consumer sentiment index was revised upward by +0.9 to 61.3, stronger than expectations of 61.0. In addition, the University of Michigan U.S. Nov 1-year inflation expectations unexpectedly rose +0.1 to a 7-month high of 4.5%, above expectations of no change at 4.4%. On the bearish side, Oct capital goods new orders nondefense ex-aircraft and parts, a proxy for capital spending, unexpectedly fell -0.1% m/m, weaker than expectations of +0.1% m/m.
