The dollar index (DXY00) on Wednesday rose by +0.22%. The dollar whipsawed higher on Wednesday after recovering from a 3.5-year low. The dollar initially retreated on Wednesday after the FOMC cut interest rates by -25 bp and signaled another -50 bp of rate cuts by year's end. However, the dollar recovered its losses and turned higher on hawkish comments from Fed Chair Powell, who said higher goods prices are feeding through to inflation and that the FOMC expects inflation to continue to build into next year, which may limit how much more the Fed can cut interest rates.
US Aug housing starts fell -8.5% m/m to 1.307 million, weaker than expectations of 1.365 million. Aug building permits, a proxy for future construction, unexpectedly fell -3.7% m/m to a 5.25-year low of 1.312 million, weaker than expectations of an increase to 1.370 million.
