The dollar index traded just below the 104 mark on Tuesday, hovering at its strongest levels since early August and tracking a rise in Treasury yields amid a robust economic outlook in the US and increasing likelihood of another Trump presidency.
Dollar index falls below 104
A series of economic data on the labor market, consumer inflation and retail sales suggested the economy remains resilient, reducing the need for aggressive rate cuts from the Federal Reserve. Given the run of solid US economic data, Minneapolis Fed President Neel Kashkari said the long term trajectory for interest rates could be higher than it has in the past. Dallas Fed President Lorie Logan also said she supports rate cuts but called for a patient approach.
Trump trade helped the greenaback
Meanwhile, the so-called “Trump trade” lifted the dollar further as the former president’s tariff and tax policies are seen as inflationary. Investors now look ahead to Thursday's release of flash PMIs which will provide an updated view of private sector performance in October.
