The US dollar weakened against major currencies in New York foreign exchange trading on Tuesday, October 6, after oil prices pulled back, easing investors' inflation concerns and dragging US Treasury yields lower as well. The dollar index, which measures the greenback against a basket of six major currencies, fell 0.33% to 101.833, while the yield on the 10-year US Treasury note declined to 5.256% after surging to its highest level since April 2002 on Monday, October 5. Investors are watching today's release of the Fed's September meeting minutes for clear signals on the direction of interest rates. CME Group's FedWatch Tool indicates that investors now assign only a 21.6% probability to a Fed rate hike at the October meeting, down from 70.9% a week earlier. Meanwhile, the US Commerce Department reported that the US trade deficit widened 13.7% to 105.6 billion dollars in August, above analysts' forecast of 102 billion dollars, marking the largest deficit since March 2025, hit by a surge in imports of goods tied to the expansion of AI infrastructure.
Treasury yields fell as easing inflation concerns and Fed rate-hike odds dropped, pushing the 10-year yield down from Monday's high.
