The dollar index (DXY00) tumbled to a 2.5-week low on Tuesday and finished down by -0.25%. The dollar retreated on Tuesday, pressured by a rally in the Chinese yuan to a 4-year high. Weak US housing news on Tuesday was also bearish for the dollar after US Sep housing starts unexpectedly fell to a 4-month low and Sep pending home sales fell more than expected. The dollar added to its losses on Tuesday as stocks recovered from early losses and moved higher, curbing demand for dollar liquidity.
Dollar losses were limited on Tuesday after WTI crude oil fell from a 5-month high and moved lower, which weakened inflation expectations that could persuade the Fed to loosen monetary policy, a bearish factor for the dollar.
