The U.S. Dollar Index (DXY) fell by 0.14% today after hitting a two-month high, driven down by increasing stock prices and a decline in crude oil prices following news of reduced military operations between Iran and Israel. A stronger-than-expected U.S. May payroll report had initially bolstered the dollar, raising speculation for an interest rate hike by the Federal Reserve at the upcoming FOMC meeting on June 16-17, where a 25 basis point increase is currently deemed a 100% certainty.
The Eurozone’s June Sentix investor confidence index improved by 3.0 points to -3.4, significantly above the forecast of -14.0, while German factory orders dropped by 3.8% month-over-month, worse than the anticipated decline of 2.0%. The euro gained 0.14% as it recovered from a 2.25-month low, partly due to weakening dollar demand and short covering.
In Japan, the yen fell 0.09%, recovering from a five-week low against the dollar, supported by stronger-than-expected economic data, including a May Eco Watchers Outlook Survey that rose 1.3 to 40.7. Japan’s Q1 GDP was revised up to 1.8%, beating an expectation of 1.4%. Markets are currently pricing in a 91% chance for a 25 basis point rate hike from the Bank of Japan at their policy meeting on June 16.
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