Dollar Rises on Higher Yields and Crude Prices

The US dollar index (DXY) rose by +0.27% on Tuesday.

This was due to soaring T-note yields, which strengthened the dollar's interest rate differentials and pushed it higher.

Additionally, a +5% surge in WTI crude oil prices to a 6-week high raised inflation expectations, potentially leading the Fed to raise interest rates, supporting the dollar further.

The gains were limited due to weaker-than-expected US economic news, including an Aug ISM manufacturing index that fell -1.0 to 54.6 and July construction spending that dropped by -0.5% m/m.