The dollar index (DXY00) tumbled to a 2-week low on Friday and finished down by -0.19%. The dollar came under pressure Friday after Fed Chair Powell refrained from providing guidance on monetary policy or the economy during a speech at the annual IMF meeting in Bangkok. Mr. Powell’s lack of guidance reduced the chance of a Fed rate hike later this month to 13% from 27% on Thursday. A stronger Chinese yuan also weighed on the dollar after it rose to a 4-year high Friday.
The dollar recovered from its worst level after US import prices ex-petroleum rose the most in 5 months last month, a hawkish factor for Fed policy, and after manufacturing production rose as expected last month. Also, Friday’s +3% surge in WTI crude oil to a 1-monthhigh raises inflation expectations and could persuade the Fed to tighten monetary policy, a bullish factor for the dollar.
