The dollar index (DXY00) on Wednesday fell by -0.03%. The dollar is under pressure from expectations the Fed will pause its rate-hike campaign at next week’s FOMC meeting. The market expects only a 29% chance the Fed will raise its fed funds target range by +25 bp next week. The dollar recovered from its worst levels after the 10-year T-note yield rose to a 1-1/2 week high of 3.799%.
Wednesday’s U.S. economic news was mixed for the dollar. On the bearish side, the U.S Apr trade deficit widened to -$74.6 billion from -$64.2 billion in Mar, the largest deficit in 6 months but smaller than expectations of -$75.8 billion. Conversely, Apr consumer credit rose +$23.01 billion, stronger than expectations of +$22.0 billion and the most in 5 months.
