
The dollar index (DXY00) Monday rose by +0.24% and posted a 3-1/2 week high. The dollar moved higher Monday on carryover support from last Friday’s stronger-than-expected US May payroll report, which curbed expectations for Fed rate cuts. Also, higher T-note yields on Monday strengthened the dollar’s interest rate differentials.
The markets are discounting the chances for a -25 bp rate cut at 1% for the June 11-12 FOMC meeting, 8% for the following meeting on July 30-31, and 50% for the meeting after that on Sep 17-18.