The dollar index (DXY00) today is down by -0.31%. The dollar tumbled today as T-note yields dropped on the Fed-friendly US Dec CPI report that showed an unexpected easing of core inflation. Also, today’s report showed that the US Jan Empire manufacturing survey of general business conditions unexpectedly fell to an 8-month low, which is bearish for the dollar. In addition, today’s sharp rally in stocks has reduced liquidity demand for the dollar.
The US Dec CPI rose to +2.9% y/y from +2.7% y/y in Nov, right on expectations. Dec CPI ex-food and energy unexpectedly eased to +3.2% y/y +3.3% y/y in Nov, better than expectations of no change at +3.3% y/y.
