The dollar index (DXY00) today is down by -0.05% and is just above last Friday’s 4-month low. The dollar has fallen for six consecutive sessions and remains under pressure due to the negative impact of US tariffs on the US economy. Also, comment made Sunday from President Trump weighed on the dollar when he said the US economy faces “a period of transition” from his tariff policies. In addition, a slide in T-note yields today has weakened the dollar’s interest rate differentials. The dollar recovered most of its losses after today’s stock slide boosted some liquidity demand for the dollar.
Market attention this week will focus on Wednesday's Feb CPI report (expected to ease to +2.9% y/y from +3.0% y/y in Jan and core CPI is expected to ease to +3.2% y/y from +3.3% y/y in Jan). Also, US trade policies with 25% tariffs on US imports of steel and aluminum are scheduled to take effect on Wednesday. On Thursday, Feb PPI final demand will be released (expected to ease to +3.2% y/y from +3.5% y/y in Jan). On Friday, the University of Michigan Mar consumer sentiment index is expected to fall -1.2 to 63.5. Finally, the markets will also look to see if Congress can approve a spending bill to avert a government shutdown ahead of a March 15 deadline.
