Dollar Slips on Crude Oil Price Decline, Economic News Supports
The dollar index DXY declined by 0.31% today due to a 1% drop in WTI crude oil prices, which eased inflation expectations and put pressure on Fed policy.
However, losses in the dollar were limited by better-than-expected US economic news, including a 1.6% month-over-month increase in August capital goods new orders nondefense ex-aircraft and parts, as well as an unexpectedly revised upward University of Michigan September consumer sentiment index to 48.1.
New York Fed President John Williams stated that the Fed cannot ignore supply shocks with persistent effects on prices and needs to return inflation to target, supporting the dollar.
The euro (EUR/USD) fell by 0.96% today as short covering in the yen emerged after Japanese Prime Minister Sanae Takaichi told President Trump about the problematic undervalued yen, which added to its gains with Japanese Finance Minister Satsuki Katayama's coordination signal and a 1% fall in crude oil prices supporting Japan's economy.
December COMEX gold (GCZ26) rose by 5.40 (+0.13%) today as precious metals prices climbed amid a weaker dollar, while hawkish comments from John Williams limited gains.