The dollar index (DXY00) on Monday rose by +0.69% and posted a 10-month high. Rising T-note yields supported the dollar after the 10-year T-note yield Monday climbed to a 16-year high of 4.701%. Also, weakness in the yen is supportive of the dollar after the BOJ announced additional bond purchases, which knocked the yen down to an 11-1/4 month low against the dollar. The dollar extended its gains on hawkish comments from Fed Governor Bowman and after the U.S. Sep ISM manufacturing index rose more than expected, a hawkish factor for Fed policy.
Monday’s U.S. economic news was mostly better than expected and bullish for the dollar. The Sep ISM manufacturing index rose +1.4 to 49.0, stronger than expectations of 47.9. Also, Aug construction spending rose +0.5% m/m, right on expectations.
