The US dollar as tracked by the US Dollar index weakened against its main peers today after the release of weak US macro data. The greenback ignored the poor non-farm payrolls released on Friday by starting the week on an upward trend before retracing some of its gains after the release of disappointing US ISM services data.
The US dollar opened today’s session on an upward trend given that the US Dollar index hit a daily high of 96.97 almost breaking above the 97.00 resistance level before retracing some of its gains.
The greenback weakened against its main peers after the US factory orders for April declined by 0.2% in line with market expectations. The ISM services/non-manufacturing composite for May did not meet expectations as it came in at 56.9 versus the expected 57.1 and the previous 57.5. The US factory orders for April also missed expectations as they contracted by 0.8% as compared to the market consensus of a 0.6% contraction.
the DXY lost some of its upward momentum following a decline in the 10-year bond yields, which dropped to 2.17% from 2.19% earlier in the day. However, there is a high likelihood that the Federal Reserve shall hike interest rates at its June meeting. This is according to the CME FedWatch Tool, which puts the probability of a June rate hike at 96%.
The greenback’s future performance is likely to be influenced by Donald Trump‘s policies and actions in the near future given Tuesday’s empty US docket.
The GBP/USD was trading at 1.2920 as at 17:17 GMT having risen from a low of 1.2858 earlier today. The USD/CAD was trading at 1.13473 having dropped from a high of 1.3500 earlier today.
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