US dollar gives some back after the Bank of England and productivity data

<p>The US dollar is at the lows of the day against the euro and is giving back gains against the pound.</p><p>It's also at a session low against the yen.</p><p>The dollar selling comes after the Bank of England press conference wrapped up. The BOE hiked rates by 25 bps with Bailey saying there was never a case for 50 bps in his mind. The market had priced in a 33% chance of a 50 bps cut as the BOE falls behind the curve on inflation.</p><p>Also contributing to the USD turn was the Q2 prelim unit labor costs report. It showed costs up 1.6% compared to 2.6% expected. Q1 was also revised down to 3.3% from 6.3% as productivity was much stronger than believed. That means non-inflationary growth and less reason for the Fed to hike.</p><p>Watch out for dip buyers in broader risk assets but also watch the bond market. <a href="https://www.forexlive.com/news/bill-ackman-is-shorting-bonds-20230803/" target="_blank" rel="follow">Bill Ackman sounded t</a>he alarm today and the Fitch downgrade is also contributing. US 30-year yields are up 10 bps to 4.27%.</p>

This article was written by Adam Button at www.forexlive.com.