Market wrap: dollar weak again despite Fed officials - Westpac

Analysts at Westpac offered a market wrap for the US session where the dollar was once again weak.

Key Quotes:

"Global market sentiment: The US dollar continued to fall, despite Fed dove Dudley sounding upbeat on the US economy.

Interest rates: US 10yr treasury yields fell from 1.56% to 1.52%, while the 2yr was fell from 0.73% and 0.70%. Market pricing of the Fed funds rate slipped a 1-2bp, implying around a 20% chance of a rate hike in September, a 55% chance by December, and 100% by Sep 2017. Markets appeared to treat Dudley’s outlook with scepticism. He saw the labour market as sturdy, with wage growth around 2.5%, and GDP growth picking up in H2, but did not repeat his recent assertion that there was room for a September hike.

Currencies:  The US dollar index fell to a two-month low. EUR rose from 1.1305 to 1.1355 – a two-month high. USD/JPY ranged sideways between 99.75 and 100.50. AUD initially extended its jobs data related bounce to 0.7723, but the consolidated between 0.7660 and 0.7700. NZD ranged sideways 0.7265 and 0.7308. AUD/NZD slipped from 1.0580 to 1.0536."