In the Asian session on Tuesday (May 30), the U.S. dollar index fell back from a high, with the latest price of the U.S. dollar at 104.24, a drop of 0.04%. UniCredit analysts said expectations were growing that the Fed would raise interest rates in July and that a rate cut before early 2024 was less likely.
The latest from the Federal Reserve:
Money markets are pricing in about a 62 percent chance of a 25-basis-point rate hike in June, compared with about a 26 percent chance of a hike priced in a week ago. This should support the dollar and keep EUR/USD from a sharp rise above 1.08; chart analysis also shows that a break below 1.07 could accelerate the fall to 1.05.