The dollar index (DXY00) on Wednesday rose by +0.04%. The dollar on Wednesday recovered from a 3-1/2 month low and posted modest gains. The dollar rebounded after Wednesday’s economic news showed Q3 GDP was revised higher than expected. Also, an easing of consumer price pressures in Germany and Spain is dovish for ECB policy and weighed on the euro to benefit the dollar. Strength in stocks on Wednesday curbed liquidity demand for the dollar and limited the dollar’s upside.
Wednesday’s U.S. economic news supported the dollar after Q3 GDP was revised upward by +0.3 to +5.2% (q/q annualized), stronger than expectations of +5.0%. The Q3 GDP price index was revised upward by +0.1 to 3.6%, stronger than expectations of no change at 3.5%, although the Q3 core PCE deflator was revised downward by -0.1 to 2.3%, weaker than expectations of no change at 2.4%.
