The dollar index (DXY00) on Tuesday rose by +0.22%. The dollar on Tuesday posted moderate gains as concern about the ongoing U.S. debt ceiling turmoil boosted safe-haven demand for the dollar. Also, hawkish comments from New York Fed President Williams and Fed Governor Jefferson lifted bond yields and were bullish for the dollar. In addition, weakness in stocks on Tuesday sparked liquidity demand for the dollar.
Hawkish Fed comments Tuesday were bullish for the dollar. New York Fed President Williams said, "In my forecast, we need to keep a restrictive stance of policy in place for quite some time, and I don't see in my baseline forecast any reason to cut interest rates this year." Also, Fed Governor Jefferson said inflation has started to come down, and the U.S. economy has started to slow in an orderly fashion.
