The dollar index (DXY00) today is down by -0.51%. The dollar today extended Monday’s losses to a 2-3/4 month low. Concerns that US tariffs will spark a trade war that undercuts economic growth are weighing on the dollar. Also, today’s decline in the 10-year T-note yield to a 4-1/2 month low has weakened the dollar’s interest rate differentials. The dollar has some support for increased liquidity demand due to today’s slide in equity markets.
Market attention this week will focus on tonight’s address to a joint session of Congress by President Trump. On Wednesday, the Feb ISM services index will be released (expected -0.1 to 52.7). On Friday, Feb nonfarm payrolls are expected to rise by +160,000, and the Feb unemployment rate is expected to remain unchanged at 4.0%. Meanwhile, Feb average hourly earnings are expected to be unchanged from Jan at +4.1% y/y. Also on Friday, Fed Chair Powell gives the keynote speech on the economic outlook at Chicago Booth’s 2025 US Monetary Policy Forum.
