The dollar index (DXY00) Wednesday rose by +0.47%. Higher T-note yields Wednesday and weakness in stocks supported moderate gains in the dollar. Also, weakness in EUR/USD benefitted the dollar on dovish comments from ECB Vice President Guindos, who said he expects the ECB to continue lowering interest rates. Hawkish comments Wednesday from Fed Governor Bowman were bullish for the dollar when she said the Fed should move cautiously on further rate cuts because progress in reducing inflation has slowed.
The dollar has risen sharply over the past two weeks to a 1-year high last week due to President-elect Trump’s plans to raise tariffs and concerns his fiscal agenda will boost inflation and deter the Fed from cutting interest rates.
