The dollar index (DXY00) on Tuesday fell by -0.21%. The dollar moved lower on Tuesday amid strength in the Chinese yuan, which rose to a 2.5-year high against the dollar. Losses in the dollar accelerated on Tuesday after higher T-note yields erased early gains and turned lower, weakening the dollar’s interest rate differentials.
Losses in the dollar were contained on Tuesday after the stock sell-off boosted liquidity demand for the dollar. Also, slightly hawkish comments from Richmond Fed President Tom Barkin were supportive of the dollar when he said the US economic outlook is improving and that inflation is still running above the Fed’s goal.
