The dollar remained stronger, after jumping overnight with higher Treasury yields, on the publication of data showing the US trade deficit narrowed in April. The trade deficit narrowed to 58.5 bln usd from 62.4 bln in March and against expectations for a widening to 63.4 bln usd. Exports remained roughly unchanged, while imports fell. "This has implications for the GDP data as the second quarter shapes up to be much stronger than the first," said Jamie Coleman at IFR Markets. The dollar had risen strongly since yesterday as interest rate markets have eliminated the probability of a rate cut in the US any time this year. In Europe and Japan, on the other hand, rate hikes are already fully priced in. "With this in mind, for the dollar to really kick higher, interest markets need to cross the line and price in a Fed rate hike," said Steve Pearson at HBOS. A strong housing market report could be enough to make this happen, he said, although next week's retail sales and CPI data will likely be the next key drivers for dollar markets.