Euro/U.S. Dollar Futures Market News and Commentary
The dollar index (DXY00) on Wednesday rose by +0.175 (+0.17%). The dollar index Wednesday rose moderately and found support from weakness in the yuan after Chinese Premier Li Keqiang said China’s economic difficulties are worse than in 2020. The minutes of the May 3-4 FOMC meeting were also supportive of the dollar as they stated that most Fed officials backed 50 bp rate hikes at the next couple of FOMC meetings.
Wednesday’s U.S. economic data was weaker-than-expected and bearish for the dollar. Apr capital goods new orders nondefense ex-aircraft & parts rose +0.3% m/m, weaker than expectations of +0.5% m/m.
The May 3-4 FOMC meeting minutes said that most Fed officials backed 50 bp rate hikes at the next couple of FOMC meetings and that restrictive policy may become appropriate. All Fed officials backed plans to start shrinking the balance sheet, and a number of officials backed the sale of mortgage-backed securities (MBS) once the runoff was well underway.
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