The dollar index (DXY00) recovered from early losses today and is up by +0.23%. The higher movement of T-note yields today strengthened the dollar's interest rate differentials and sparked short covering in the dollar.
The dollar initially moved lower today as the US government shutdown entered its second day. Also, signs of weakness in the US labor market are bolstering the outlook for the Fed to cut interest rates at the October 28-29 FOMC meeting and are undercutting the dollar after today's report from private firm Challenger, Gray & Christmas showed US employers have cut the most jobs so far this year since 2020.
