Services Slump Ignites Dollar Volatility as Fed Bets Fade: Chart

The dollar has woken up, and a spurt of mediocre economic data looks to be giving it a hangover. Volatility in the Bloomberg Dollar Spot index spiked higher after the Institute for Supply Management’s gauge of the U.S. services industry slid to a six-year low Tuesday. The data, which followed weak figures on manufacturing, hiring and consumer confidence, torpedoed bets on a September rate hike from the Federal Reserve, with odds at 24 percent from 34 percent a week earlier, according to Fed funds futures.

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