The dollar index (DXY00) Thursday tumbled to a 2-1/4 month low and finished down by -0.72%. Thursday’s comments from Treasury Secretary Bessent sent T-note yields lower and weighed on the dollar when he said any move by the Treasury to boost the share of longer-term Treasuries in government debt issuance is a “long way off.” The dollar also came under pressure after weekly US unemployment claims rose more than expected and Jan leading indicators fell more than expected, which are dovish factors for Fed policy. In addition, the dollar came under pressure Thursday when the yen rallied to a 2-1/4 month high against the dollar.
The dollar saw support Thursday from US tariff threats and weakness in stocks, which boosted liquidity demand for the dollar. Also, hawkish comments from St. Louis Fed President Musalem supported the dollar when he said Fed policy should remain “modestly restrictive” until inflation is on track to the Fed’s 2% target.
