The dollar index (DXY00) on Thursday rose by +0.74%. The dollar rallied Thursday, rebounding further above Wednesday’s 3-1/2 month low. Hawkish comments Thursday from New York Fed President Williams and San Francisco Fed President Daly pushed T-note yields higher and boosted the dollar. Also, a weaker-than-expected Eurozone consumer price report was dovish for ECB policy and weighed on the euro to the dollar’s benefit.
Thursday’s U.S. economic news was mixed for the dollar. On the bullish side, the Nov MNI Chicago PMI rose +11.8 to a 1-1/2 year high of 55.8, stronger than expectations of 46.0. Conversely, weekly continuing claims rose +86,000 to a 2-year high of 1.927 million, showing a weaker labor market than expectations of 1.865 million. Also, the Oct core PCE deflator, the Fed's preferred gauge of inflation, eased to +3.5% y/y from +3.7% y/y in Sep, right on expectations and the slowest pace of increase in 2-1/2 years.
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