The dollar index (DXY00) fell from a 2.5-week high on Wednesday and finished down by -0.08%. The dollar gave up an overnight advance and turned lower today when the weaker-than-expected US Aug ADP employment report knocked T-note yields lower. The dollar also came under pressure on dovish comments from New York Fed President John Williams, who said inflation is continuing to trend down. In addition, strength in stocks on Wednesday reduced liquidity demand for the dollar.
The dollar initially moved higher on Wednesday after escalation of US-Iran hostilities boosted crude oil prices and pushed the 10-year T-note yield to a 2.75-year high, strengthening the dollar's interest rate differentials.
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