The dollar index (DXY00) on Wednesday rose by +0.32%. The dollar Wednesday posted moderate gains on a surge in the 10-year T-note yield to a 16-year high, strengthening the dollar’s interest rate differentials. Also, the slump in stocks Wednesday boosted the liquidity demand for the dollar. In addition, geopolitical risks in the Middle East increased safe-haven demand for the dollar after an explosion at a Gaza hospital that killed hundreds complicated diplomatic efforts to contain the Israeli-Hamas conflict.
Wednesday’s U.S. housing news was mixed for the dollar. Sep housing starts rose by +7.0% to 1.358 million units, which was weaker than expectations for an increase to 1.383 million. However, Sep building permits fell by -4.4% to 1.473 million units, slightly stronger than expectations for a larger decline to 1.453 million units.
