The dollar index (DXY00) on Tuesday rose by +0.02%. The dollar recovered from early losses on Tuesday and moved slightly higher after US Apr JOLTS job openings unexpectedly rose to a 23-month high, a hawkish factor for Fed policy. Also, hawkish comments from Cleveland Fed President Beth Hammack boosted the dollar when she said the Fed’s benchmark rate “may not be restrictive,” and “if recent data trends continue, it may soon be appropriate for policy to act to address the growing risk of persistently elevated inflation.” In addition, Tuesday’s +1% jump in crude oil prices raised inflation expectations, a hawkish factor for Fed policy.
The dollar initially moved lower on Tuesday after comments from President Trump reduced safe-haven demand for the dollar when he said that negotiations with Iran are continuing “at a rapid pace” and he’s optimistic the US can reach an interim peace deal with Iran” over the next week.” Also, lower T-note yields on Tuesday weakened the dollar’s interest rate differentials. In addition, strength in China’s yuan is weighing on the dollar, as the yuan climbed to a 3.25-year high on Tuesday.
