The dollar index (DXY00) today recovered from a 1.5-month low and is up by +0.08%. Higher T-note yields today strengthened the dollar's interest rate differentials and sparked short covering in the dollar. The dollar today initially whipsawed lower and then higher after preliminary benchmark payroll revisions to US payrolls in the year through March 2025 showed fewer jobs than previously stated.
Limiting the upside in the dollar are the increased expectations for Fed easing through year-end. The dollar is also being undercut by concerns over Fed independence, which could prompt foreign investors to dump dollar assets as President Trump attempts to fire Fed Governor Cook, and by Stephen Miran's intention to be a Fed Governor while still technically holding his White House job on the Council of Economic Advisors.
