Dollar Hits Highest Since April, Markets Reprice the Fed
The US dollar index (DXY) strengthened to the 99.50 area on Wednesday (June 3) after the US ISM Services PMI rose to 54.5 in May from 53.6 in April. This data confirmed that the US services sector remains expanding and the economy remains resilient, supporting US bond yields and keeping the greenback in demand. The DXY also briefly touched 99.55, its highest level since April 7.
In major markets, EUR/USD remained pressured around 1.1600 as a stronger dollar curbed the euro's recovery. GBP/USD weakened to the 1.3420 area, with sterling struggling to gain momentum amid investor caution ahead of the UK economic data release and fiscal concerns.
In Asia, USD/JPY retested the 160.00 level on the back of strong US data. Bank of Japan Governor Kazuo Ueda said the central bank would need to weigh the pros and cons of raising interest rates if inflation risks outweigh risks to growth, signaling that normalization remains gradual and won't automatically provide significant support for the yen.
Meanwhile, AUD/USD fell near 0.7130, a one-week low, as a stronger dollar weighed on riskier currencies. With US data again solid, the market now expects the pressure on the dollar to ease only if subsequent data shows consistent economic weakness—or if geopolitical volatility triggers a major shift to risk-off in a different pattern. (arl)
Source: Newsmaker.id
