The dollar index (DXY00) Thursday rose by +0.77% and posted a 1-week high. The dollar rallied Thursday on signs of strength in the US economy after Q4 GDP was left unrevised. Also, Jan capital goods new orders nondefense ex-aircraft and parts, a proxy for capital spending, rose more than expected. The dollar raced to its high Thursday after President Trump said that the proposed 25% tariffs on Canada and Mexico will go into effect on March 4, and China will likewise be charged an additional 10% tariff on that date. The dollar maintained its gains on hawkish comments from Cleveland Fed President Hammack, who said US interest rates are not “meaningfully restrictive” and should be held steady for some time.
Bearish factors for the dollar Thursday included a jump in weekly jobless claims to a 2-1/2 month high and weaker-than-expected Jan pending home sales.
