The dollar index (DXY00) today is up by +0.05%. The dollar today recovered from early losses and posted modest gains on signs of strength in the US economy after the Jun MNI Chicago PMI rose more than expected to a 7-month high and the University of Michigan US Jun consumer sentiment index was revised higher than expected. Also, hawkish comments from Richmond Fed President Barkin boosted the dollar when he said that Fed policy may not be as restrictive as perceived.
The dollar today initially moved lower after the US May core PCE price index, the Fed’s preferred inflation gauge, eased to +2.6% y/y, the slowest pace in 3 years, which improves the chances of Fed interest rate cuts this year. Also, the strength in stocks today has reduced the liquidity demand for the dollar.
