
The dollar index (DXY00) Tuesday rose by +0.28% and posted a 3-1/2 week high. The dollar on Wednesday recovered from overnight losses and moved higher due to the jump in T-note yields. Also, Wednesday’s slump in stocks boosted the liquidity demand for the dollar. The dollar Wednesday initially moved lower after Fitch Ratings cut the sovereign credit rating of the U.S. by one level to AA+ from AAA.
Wednesday’s U.S. economic news was bullish for the dollar after the Jul ADP employment change rose +324,000, showing a stronger labor market than expectations of +190,000.