The dollar index (DXY00) Friday rose by +0.22%. Positive trade news is bullish for the dollar as the US moves closer to trade deals with China and other trading partners. The dollar also found support after the US May core PCE price index, the Fed's preferred gauge of underlying inflation, rose more than expected, a hawkish factor for Fed policy. In addition, an upward revision to the University of Michigan's US June consumer sentiment index is supportive of the dollar. The dollar raced to its high Friday afternoon when President Trump said he was ending all trade discussions with Canada and threatened new tariffs on the country after it moved to implement a digital services tax.
Gains in the dollar were limited from Friday's weaker-than-expected US May personal spending and income reports. Also, dovish comments from Minneapolis Fed President Kashkari weighed on the dollar when he said he sees two 25 bp Fed rate cuts this year.
