The dollar index (DXY00) Tuesday fell by -0.55% and posted a 1-week low. The dollar moved lower Tuesday after T-note yields declined on the weaker-than-expected US July PPI report, which bolstered the chances for a Fed rate cut at the September FOMC meeting. Tuesday’s rally in stocks also reduced liquidity demand for the dollar. The dollar extended its losses Tuesday afternoon on dovish comments from Atlanta Fed President Bostic, who said he'll likely be ready to support Fed rate cuts "by the end of the year."
US July PPI final demand eased to +2.2% y/y from +2.7% y/y in June, a smaller increase than expectations of +2.3% y/y. Also, July PPI ex-food and energy eased to +2.4% y/y from +3.0% y/y in June, better than expectations of +2.6% y/y.
