Market sours on near-term hike
One of the reasons the US dollar is under pressure today is a drop in expectations the FOMC will hike rates on June 15.
The implied probability of a June hike in the Fed fund futures market is down to 18% from 24% yesterday and 30% at the end of the day Friday.
July hike odds are down to 49% from 53% yesterday. By year end, the chance of a hike has held relatively steady at 73%.
Yellen said Friday a hike is likely 'in the coming months' which probably rules out June but I don't see the reason for the sudden drop today. But it's a new month and the flows can put a skew on markets.
July and December are on the table but it's a race out of dollars (and GBP) today.
