2023.06.0720:43:00UTC+00Dollar Turns In Mixed Performance As Traders Weigh Interest Rate Prospects

The U.S. dollar turned in a mixed performance on Wednesday with traders weighing the likely move of the Federal Reserve with regard to interest rates, and the inflation data due next week.

A report released by the Commerce Department showed the U.S. trade deficit widened significantly in the month of April.

The Commerce Department said the trade deficit increased to $74.6 billion in April from a revised $60.6 billion in March.

Economists had expected the trade deficit to jump to $75.2 billion from the $64.2 billion originally reported for the previous month.

The wider trade deficit came as the value of exports plunged by 3.6% to $249.0 billion, while the value of imports surged by 1.5% to $323.6 billion.

The dollar index dropped to a low of 103.66 around mid morning, but recovered to 104.15 later on, edging marginally up from the previous close.

Against the Euro, the dollar is down marginally at 1.0699. The dollar is weak against Pound Sterling at 1.2440. Against the Japanese currency, the dollar firmed to 140.16 yen, rising from 139.64 yen.

Against the Aussie, the dollar strengthened to 0.6653 after having eased to 0.6717. The dollar is gaining against Swiss franc, fetching CHF 0.9102 a unit. Against the Loonie, the dollar is down at C$1.3375, after the Bank of Canada raised interest rates by 25 basis points, citing stubbornly high inflation and strong than expected economic growth.

The BoC, which had left interest rates unchanged for two straight meetings, said the rate hike reflects its view that monetary policy was not sufficiently restrictive to bring supply and demand back into balance and return inflation sustainably to the 2% target. The central bank reiterated that it remains resolute in its commitment to restoring price stability for Canadians.

The bank's Governing Council said it will continue to assess the dynamics of core inflation and the outlook for consumer price inflation.