The dollar index (DXY00) Monday fell by -0.33% and posted a 1-week low. Strength in the yen undercut the dollar after the yen on Monday rose to a 13-1/2 month high against the dollar. The dollar was also undercut by heightened speculation that the Fed might cut the fed funds target range by 50 bp at this week’s FOMC meeting. Swap markets show that the odds of a 50 bp rate cut rose to 64% from 52% last Friday. A supportive factor for the dollar was Monday’s US Sep Empire manufacturing survey, which showed that general business conditions rose more than expected to a 2-1/3 year high.
The US Sep Empire manufacturing survey general business conditions index rose +16.2 to a 2-1/3 year high of 11.5, stronger than expectations of -4.0.
