Dollar Falls as Weak US ISM Data Dampens Fed Rate-Rise Prospects

0711 GMT – The dollar falls as Monday’s unexpectedly weak U.S. ISM services activity data for May raises concerns about a weakening economy, which could hinder further U.S. interest-rate increases. “The U.S. dollar is being held back by the reluctance of U.S. rate market participants to price in another rate hike as soon as next week’s FOMC meeting,” says MUFG senior currency analyst Lee Hardman in a note. “The latest ISM services survey brought an end to the recent run of stronger than expected U.S. economic data releases.” MUFG expects the dollar to weaken later this year as inflation will likely slow more quickly than expected, he says. The DXY dollar index falls 0.1% to 103.866. (jessica.fleetham@wsj.com)