The dollar index (DXY00) on Wednesday fell by -0.28%. The dollar was under pressure Wednesday due to a decline in T-note yields. Also, the euro's strength Wednesday undercut the dollar based on hawkish comments from ECB President Lagarde and ECB Governing Council member Holzmann. Losses in the dollar were contained as expectations for Fed rate cuts have fallen. According to federal funds futures contracts, the chance of a Fed rate cut at the June FOMC meeting has dropped to 19% from 66% at the start of the month.
The Fed Beige Book said the US economy has "expanded slightly" since late February, and firms have reported greater difficulty in passing on higher costs. Also, "several reports mentioned weakness in discretionary spending, as consumers' price sensitivity remained elevated."
