The dollar index (DXY00) on Wednesday rose by +0.31%. U.S. economic concerns Wednesday fueled safe-haven demand for the dollar after reports on Mar ADP employment and Mar ISM services disappointed. The dollar also garnered support on comments from Cleveland Fed President Mester, who said to put inflation on a steady path down to 2%, monetary policy needs to move "somewhat further into restrictive territory this year.” However, gains in the dollar were limited after the 10-year T-note yields fell to a 6-3/4 month low.
Wednesday’s U.S. economic data was bearish for the dollar. The Feb trade deficit expanded to -$70.5 billion, wider than expectations of -$68.8 billion and the most in 4 months, which has negative implications for Q1 GDP. Also, the Mar ADP employment change rose+145,000, weaker than expectations of +210,000. In addition, the Mar ISM services index fell -3.9 to 51.2, weaker than expectations of 54.4.
