The dollar index (DXY00) on Tuesday recovered from a 1-week low, finishing up by 0.01%. The dollar recovered from early losses on Tuesday and posted modest gains due to hawkish Fed comments. Cleveland Fed President Beth Hammack said the Fed could be on hold “for quite some time,” and Dallas Fed President Lorie Logan said it would take “material” weakness in the US labor market for her to support more interest rate cuts.
The dollar initially moved lower on Tuesday after T-note yields fell on the weaker-than-expected US economic reports on the Q4 employment cost index and Dec retail sales. The weaker reports bolstered expectations that the Fed will resume easing monetary policy this year, a bearish factor for the dollar. The strength of the Chinese yuan also undercut the dollar after it rose to a 2.5-year high against the dollar on Tuesday.
