The dollar index (DXY00) on Wednesday rose by +0.06%. The dollar posted modest gains on Wednesday after hawkish comments from Atlanta Fed President Bostic, who said he favored keeping interest rates steady. Weakness in the yen is also supportive of the dollar, as the yen fell to a 9.25-month low against the dollar on Wednesday amid concerns that the Japanese government will pursue a more expansionary fiscal policy. Gains in the dollar were limited, as Wednesday's stock strength reduced liquidity demand for the dollar.
The dollar is also under pressure amid signs that a resolution to the US government shutdown is nearing. After the Senate voted 60-40 on Monday to pass a temporary continuing resolution (CR) to fund the government, the House is expected to vote on the measure later Wednesday, and if approved, the bill goes to President Trump, who said he will sign it into law. The reopening of the government would allow the release of economic reports, which may show a weakening US economy, prompting the Fed to keep cutting interest rates.
