The dollar index (DXY00) on Thursday fell by -0.33%. The dollar retreated Thursday on comments from Fed Chair Powell that suggested the Fed will keep interest rates on hold for a second consecutive meeting when the FOMC meets next on Oct 31-Nov 1. Losses in the dollar were limited after the 10-year T-note yield climbed to a 16-year high, which strengthened the dollar’s interest rate differentials. Also, weakness in stocks spurred some liquidity demand for the dollar.
Thursday’s U.S. economic news was mixed for the dollar. On the negative side, Sep existing home sales fell -2.0% m/m to a 13-year low of 3.96 million. Also, the Oct Philadelphia Fed business outlook survey rose +4.5 to -9.0, weaker than expectations of -7.0. In addition, Sep leading indicators fell -0.7% m/m, weaker than expectations of -0.4% m/m and the biggest decline in 4 months. On the positive side, weekly initial unemployment claims unexpectedly fell -13,000 to an 8-3/4 month low of 198,000, showing a stronger labor market than expectations of an increase to 210,000.
