The dollar index (DXY00) Wednesday fell by -0.50% and posted a 1-1/2 week low. The dollar retreated Wednesday as the yen soared to a 4-1/2 month high against the dollar after the BOJ unexpectedly raised its benchmark interest rate. The dollar was also under pressure from a sharp rally in stocks, which curbs liquidity demand for the dollar. In addition, weaker-than-expected US economic news Wednesday on Jul ADP employment and the Q2 employment cost index knocked the 10-year T-note yield down to a 4-1/2 month low and undercut the dollar. The dollar maintained its losses after Fed Chair Powell said a Fed rate cut "could be" on the table at the September FOMC meeting.
The US Jul ADP employment change rose +122,000, weaker than expectations of +150,000 and the smallest increase in 6 months.
