Dollar Edges Higher as Stocks Slide on Inflation Expectations

The US dollar gained ground on Tuesday as stocks slid, causing demand for dollar liquidity to rise. The Dollar Index (DXY) rose by +0.10% in a single day.

Tuesday's rally in WTI crude oil prices to a three-week high boosted inflation expectations and may prompt the Fed to tighten monetary policy, which is positive for the dollar.

Rising T-note yields also strengthened the dollar's interest rate differentials. The 10-year T-note yield rose to a 1.5-year high of 4.75% on Tuesday.