The dollar index (DXY00) Tuesday rose by +0.01% and posted a 2-week high. Higher T-note yields Tuesday were supportive for the dollar. Also, expectations for the Fed to raise the fed funds target range by 25 bp following the conclusion of the Tue/Wed FOMC meeting is bullish for the dollar. The dollar raced to its high Tuesday after the Conference Board U.S. Jul consumer confidence index rose more than expected to a 2-year high. The dollar gave up most of its advance Tuesday as the yuan strengthened to a 1-week high against the dollar after China’s Politburo signaled more support for China’s economy.
Tuesday’s U.S. economic news was hawkish for Fed policy and bullish for the dollar. The May S&P CoreLogic composite-20 home price index fell -1.70% y/y, a smaller decline than expectations of -2.35% y/y. Also, the Conference Board Jul consumer confidence index rose +6.9 to a 2-year high of 117.0, stronger than expectations of 112.0. In addition, the Jul Richmond Fed manufacturing survey fell -1 to -9, a smaller decline than expectations of -10.
