
The dollar index (DXY00) Wednesday rose +0.07% and posted a new 5-1/2 month high. The dollar recovered from overnight losses and moved slightly higher as T-note yields climbed on the stronger-than-expected Aug ISM services report. Also, hawkish comments from Boston Fed President Collins supported the dollar. In addition, Chinese economic concerns weighed on the yuan, which fell to a 10-month low against the dollar Wednesday.
U.S. economic news Wednesday supported the dollar after the Aug ISM services index unexpectedly rose +1.8 to a 6-month high of 54.5, stronger than expectations of a decline to 52.5. Also, the July trade deficit widened to -$65.0 billion from -$63.7 billion in June, a smaller deficit than expectations of -$68.0 billion.