Dollar Gains as Hot Inflation, Hawkish Fed Talk Lift Rate-Hike Bets
- On Wednesday, the dollar held gains near a two-week high in early Asian trade as a hotter-than-expected inflation report and hawkish comments from Federal Reserve officials fuelled bets the central bank will raise rates next month.
- Comments from voting members of the Federal Reserve signalling unease over high inflation prompted traders to abandon bets that the central bank will stand pat at its next policy meeting concluding in Dec.
- According to CME Group's FedWatch tool, Fed funds futures now imply a 91.9% chance of a 25-basis-point rate hike next month, up from 84% a day earlier, while the 10-year Treasury yield rose to 4.996%.
- "The rates market isn't simply pricing another hike," said Chris Weston, head of research at Pepperstone Group Ltd in Melbourne, noting the market questions how restrictive monetary policy may ultimately need to become.
- Markets have fully priced out the possibility of a pause, assigning better-than-even odds to a second hike in January and seeing a 9.1% chance of a larger 50-basis-point move.
22 Articles
22 Articles
The dollar has risen abroad to its highest level since March last year, following the gains of the previous year in the face of higher interest bets in the United States. These bets take place after the strongest inflation data of October than expected in the country and after comments from authorities of the Federal Reserve (Fed) more prone to monetary tightening. Around 11h10, the DXY index – measuring the ratio between the dollar and a basket…
The dollar rose as American interest-raising prospects grew in December, following higher-than-anticipated inflation data and statements by Federal Reserve officials tending to monetary tightening, while most major currencies declined.
Dollar gains as hot inflation, hawkish Fed talk lift rate-hike bets
Nov 11 : The dollar rose against most currencies on Wednesday, extending gains after inflation data and hawkish comments from Federal Reserve officials a day earlier fuelled bets that the US central bank will raise interest rates next month.The US dollar index, which measures the greenback's strength against
The dollar rose to a near two-week high in Asian trading on Wednesday, as higher-than-expected US inflation data and dovish statements from central bankers raised the odds of a rate hike next month. Investors have now fully priced in the possibility of a December rate hike. The movements also reached the forint market, with the Hungarian currency attempting to correct on Wednesday after weakening on Tuesday.
The better-than-expected core inflation figures for October in the US, along with tightening signals from Fed officials, supported the dollar. The dollar index is trading near its highest level in two weeks, and markets are beginning to price in a 50 basis point interest rate hike in December.
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