The dollar index (DXY00) Wednesday rose by +0.50% after CNN reported that President-elect Trump is considering declaring a national emergency to push through his tariff plans, which could roil global trade and boost inflation pressures. The dollar extended its gains after the 10-year T-note yield jumped to an 8-1/2 month high, strengthening the dollar’s interest rate differentials. The dollar maintained its gains on the hawkish minutes of the Dec 17-18 FOMC meeting.
Wednesday’s US labor market news was mixed for the dollar as the Dec ADP employment change rose less than expected, but weekly jobless claims unexpectedly fell to a 10-1/2 month low. Dovish comments today from Fed Governor Waller limited gains in the dollar when he said he believes more Fed interest rate cuts will be appropriate.
