The dollar index (DXY00) on Tuesday rose by +0.20% and climbed to a 9-3/4 month high. Hawkish comments from Minneapolis Fed President Kashkari Tuesday supported the dollar when he said he expects the Fed to raise interest rates again this year. Also, weakness in the euro was bullish for the dollar after dovish ECB comments knocked EUR/USD down to a 6-1/2 month low. In addition, higher T-note yields and a slump in stocks were positive for the dollar. However, gains in the dollar were limited by weaker-than-expected U.S. new home sales and consumer confidence reports.
Tuesday’s U.S. economic news was mixed for the dollar. On the positive side, the Jul S&P CoreLogic composite-20 home price index unexpectedly rose +0.13% y/y, the first year-on-year increase in 5 months and stronger than expectations of a -0.10% y/y decline. Also, the Sep Richmond Fed manufacturing survey rose +12 to a 17-month high of 5, stronger than expectations of no change at -7.
