The dollar index (DXY00) rose by +0.09% on Wednesday. The dollar shook off early losses on Wednesday and moved higher after T-note yields rose. Signs of strength in the US economy also supported the dollar after Q2 GDP was revised higher, and the Sep ADP employment change and Sep MNI Chicago PMI rose more than expected. In addition, Aug personal spending rose the most in 5 months. Finally, Wednesday’s +1% increase in WTI crude oil raises inflation expectations that could prompt the Fed to tighten monetary policy, a supportive factor for the dollar.
The dollar initially moved lower on Wednesday as US economic news showed weaker-than-expected inflation readings on Aug core PCE price index and the Q2 core PCE price index and lessened the chance of a Fed rate hike next month. Fed rate hike chances for the October FOMC meeting dropped to 37% on Wednesday from 52% on Tuesday.
