The dollar index (DXY00) climbed to a 1-week high today and is up by +0.18%. The dollar is moving higher today due to weakness in the yen. Also, upbeat comments today from New York Fed President John Williams supported the dollar, as he said some of the data we're seeing is "pretty encouraging" and that he sees no sign of a sharp deterioration in the jobs data. The dollar fell back from its best level after the University of Michigan's US Dec consumer sentiment index was unexpectedly revised lower. Also, strength in stocks today is limiting the dollar's upside.
The dollar is also under pressure as the Fed boosts liquidity in the financial system, having begun purchasing $40 billion a month in T-bills, effective last Friday. Finally, the dollar is also being undercut by concerns that President Trump intends to appoint a dovish Fed Chair, which would be bearish for the dollar. Mr. Trump recently said that he will announce his selection for the new Fed Chair in early 2026. Bloomberg reported that National Economic Council Director Kevin Hassett is the most likely choice as the next Fed Chair, seen by markets as the most dovish candidate.
