The dollar index (DXY00) Wednesday rose by +0.08%. The dollar on Wednesday garnered support from the stronger-than-expected U.S. Aug CPI report, which is hawkish for Fed policy. Weakness in stocks on Wednesday also boosted the liquidity demand for the dollar. Gains in the dollar were limited by lower T-note yields.
U.S. Aug CPI increased to +3.7% y/y from +3.2% y/y in July, stronger than expectations of +3.6% y/y. However, Aug CPI ex-food and energy eased to +4.3% y/y from +4.7% y/y in July, right on expectations and the slowest pace of increase in almost two years.
