Dollar dips as European yields pull back from highs
UUP•The dollar index fell 0.15% to 102.10 as the euro rose 0.19% to $1.1216 after European bond yields retreated from intraday highs. Markets priced a 19.4% chance of a Fed rate hike this month and an 87.9% chance of a hike in December.
1. Dollar and euro moves
The dollar declined on Thursday as euro zone bond yields eased from sharp gains, and the euro recovered from earlier lows. France’s 10-year yield was little changed at 4.8735% after reaching 4.9685% during the day.
2. Fed rate expectations
Federal Reserve Governor Christopher Waller said further rate hikes will likely be needed to lower inflation to the Fed’s 2% target, but said there was flexibility on their pace and left the door open to a pause at the October meeting. Markets priced a 19.4% chance of a hike of at least 25 basis points this month, down from 24.4% a week earlier, and an 87.9% chance of a December hike.
3. US jobs data
Weekly initial jobless claims fell 2,000 to 197,000, below economists’ 200,000 estimate, the Labor Department said.
