
The dollar index (DXY00) today is down -0.03%. The dollar today is being undercut by reduced safe-haven demand after Israel launched a limited retaliatory strike against Iran, reducing the chances for an all-out Middle East conflagration. However, the dollar is seeing underlying support from today’s +1.6 bp rise in the 10-year T-note yield.
The markets are discounting the chances at 96% for a -25 bp rate cut at the November 6-7 FOMC meeting and at 0% for a -50 bp rate cut at that meeting.