The dollar index (DXY00) on Friday fell by -0.08%. The dollar Friday fell back slightly as T-note yields declined, weakening the dollar’s interest rate differentials. Also, dovish comments Friday from Philadelphia Fed President Harker and Cleveland Fed President Mester undercut the dollar when they said they favored the Fed continuing its pause on rate hikes. Losses in the dollar were limited as a slide in stocks boosted the liquidity demand for the dollar.
Comments from Philadelphia Fed President Harker suggest he favors a Fed pause on rate hikes when he said the FOMC should allow policy actions taken so far to continue to work and then closely watch data before making any decisions on moving the policy rate in either direction. Also, Cleveland Fed President Mester said, "Regardless of the decision made at the next FOMC meeting, if the economy evolves as anticipated, in my view, we are likely near or at a holding point on the funds rate."
