The dollar index (DXY00) fell to a 1-week low today and is down by -0.75%. The dollar is under pressure today after a Bloomberg report said that Chinese regulators have advised financial institutions to rein in their holdings of US Treasuries, fueling concerns that foreigners will reduce their demand for US dollar assets. Strength in the Chinese yuan also undercut the dollar after the yuan rose to a 2.5-year high against the dollar today. Losses in the dollar accelerated today after National Economic Council Director Hassett said we should expect slightly lower US job numbers, citing slower population growth and higher productivity.
The dollar sank to a 4-year low late last month when President Trump said he’s comfortable with the recent weakness in the dollar. Also, the dollar remains under pressure as foreign investors pull capital from the US amid a growing budget deficit, fiscal profligacy, and widening political polarization.
