The dollar index (DXY00) is down by -0.30%, falling back from Monday’s 1.5-year high. The dollar is under pressure today after WTI crude oil fell nearly -1%, lowering inflation expectations that could prompt the Fed to loosen monetary policy and undercut the dollar. The dollar added to its losses today on comments from Fed Governor Christopher Waller, who said the recent surge in long-term bond yields is doing some of the Fed's work to tighten monetary policy, suggesting he favors holding policy steady at the FOMC meeting later this month.
The dollar recovered from its worst level on hawkish comments from Chicago Fed President Austan Goolsbee, who said inflation tied to the AI boom is "jumping out of its lane" and starting to push up prices in unrelated corners of the economy. Also, the unexpected increase in Sep existing home sales is supportive for the dollar.
