Dollar climbs on strong US economic reports

What happened: The dollar index (DXY00) surged today, up +0.24%, driven by robust U.S. economic data. March housing starts and core capital goods new orders outperformed expectations, bolstering the greenback. Additionally, a +4% jump in crude oil prices increased inflation expectations, a hawkish signal for Fed policy.

Market impact: The stronger dollar negatively impacted commodities like oil and gold, which typically move inversely to the dollar. Meanwhile, the positive economic data and increased inflation expectations boosted Treasury yields, making U.S. bonds more attractive and driving demand for the dollar.

What to watch next: Investors should closely monitor the FOMC meeting on May 3-4 for any policy changes or guidance on future rate hikes. Additionally, upcoming economic data releases, such as the April jobs report on May 7, will continue to influence the dollar's trajectory.