Market wrap: US dollar index is down 1% - Westpac

Analysts at Westpac explained a market wrap for the US session.

Key Quotes:

"Global market sentiment: The continuing US dollar slide was only partly arrested by some hawkish Fedspeak, although US interest rates took more notice and priced a 60% chance of a Fed rate hike by December.

Interest rates: US 10yr treasury yields rose from 1.52% to 1.59%, while the 2yr yield rose from 0.70% to 0.75%. Market pricing of the Fed funds rate rose, implying around a 20% chance of a rate hike in September, a 60% chance by December, and 100% by Aug 2017. Fed moderate Lockhart offered few clues on rate hike timing, but dove Dudley said it’s getting closer to pulling the trigger. That had more impact than the mixed data, housing starts strong but core CPI slightly disappointing.

Currencies:  The US dollar index is down around 1% to a two-month low. EUR rose from 1.1200 to 1.1323 before consolidating around 1.1275. USD/JPY fell from 100.50 to 99.54 but rebounded on Dudley. AUD rose from 0.7680 to 0.7749 on the weaker US dollar, but then slumped to 0.7672 on Dudley. NZD rose from 0.7230 to 0.7305 before a Dudley slump to 0.7229, and then a dairy price (19% bounce in WMP) rescue to 0.7286. AUD/NZD fell from 1.0620 to 1.0575."