The dollar index (DXY00) today is up by +0.05%. The dollar is slightly higher today, boosted by hawkish comments from the Fed. Chicago Fed President Austan Goolsbee said that, given higher inflation, the more prudent course would have been for the Fed to wait for more information before cutting rates. Also, Kansas City Fed President Jeff Schmid said he prefers to keep policy "modestly restrictive" because inflation remains too high and the economy continues to show momentum. The weakness in stocks today has also boosted some liquidity demand for the dollar.
Gains in the dollar are limited as the Fed boosts liquidity in the financial system and begins purchasing $40 billion a month in T-bills effective today. Also, dovish comments from Philadelphia Fed President Anna Paulson were dollar bearish, as she said she's more concerned about the labor market than inflation.
