The dollar index (DXY00) remained stable on Friday despite earlier gains, following a downward revision of the University of Michigan’s May US consumer sentiment index to a record low of 44.8, below expectations of 48.2. Additionally, hawkish remarks from Fed Governor Christopher Waller about potential interest rate hikes influenced market dynamics.
On the European front, Germany’s May IFO business confidence index unexpectedly rose to 84.9, while the June GfK consumer confidence index increased to -29.8, both surpassing expectations. ECB Governing Council member Alexander Demarco indicated a likely interest rate hike in June, with swaps markets reflecting an 88% chance of a +25 basis point increase.
In Japan, the April national CPI increased by 1.4%, below expectations of 1.6%, while Finance Minister Satsuki Katayama announced a supplementary budget of approximately 3 trillion yen ($18.9 billion). Markets are currently pricing in a 76% probability of a BOJ rate hike at the upcoming meeting on June 16.
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