Commodities
Dollar Slumps Amid Crude Oil Price Drop, Easing Inflation Expectations
The US dollar index DXY fell from its one-month high on Tuesday, finishing down 0.14%. This decline came after an unexpected drop in July consumer confidence and a plunge in WTI crude oil prices to a one-week low.
The decline in crude oil prices lowered inflation expectations, which could prompt the Federal Reserve to pursue easier monetary policy, a negative factor for the dollar.
Additionally, lower T-note yields on Tuesday weakened the dollar's interest rate differentials. However, losses in the dollar were limited due to some mild short covering ahead of the two-day FOMC meeting that began on Tuesday.