Dollar Retreats From 18-Month High Despite Hot CPI as Fed Officials Temper Hike Bets
Cautious Fed comments and lower Treasury yields pushed traders to scale back October rate-hike bets after core CPI rose 0.3%, Reuters reported.
- On Thursday, the dollar slipped from an 18-month peak as cautious remarks from Federal Reserve officials and a pullback in Treasury yields led traders to scale back expectations of an October rate hike.
- Labor Department data showed the core CPI up 0.3% in September versus expectations of 0.2%, while the headline rate rose 3.7%, pushing the dollar to an 18-month high on Wednesday before the reversal.
- San Francisco Federal Reserve Bank President Mary Daly and Vice Chair and Supervision Michelle Bowman said the Fed can wait for a clearer picture, effectively cooling market pricing for an October Fed rate hike from 50%.
- Treasury yields retreated after the initial jump, dragging the dollar lower. Sim Moh Siong, FX strategist at OCBC, wrote, "The USD rally lacked punch as the retreat in Treasury yields after an initial jump softened the rates impulse."
- Focus now shifts to US producer price and retail sales data later in the day, with reports expected to show a jump in business costs last month as market participants weigh the Federal Reserve's next move.
15 Articles
15 Articles
Today, Thursday, the dollar has fallen below its highest level in 18 months, with markets reducing their expectations of rising US interest rates during the current month, despite higher than expected inflation.
The dollar today has fallen from its highest level in 18 months, and its index, which measures the performance of the United States currency against a basket of major currencies, has fallen by 0.1% to 102.06 points. The euro rose 0.3% to $1.187, the pound sterling 0.2% to $1.3224, and the Japanese yen rose 0.3% to $157.82. In other currencies, the Australian dollar dropped 0.3% to $0.6952, while the New Zealand dollar rose to $0.5604 and the Chi…
Dollar retreats from 18-month high despite hot CPI as Fed officials ...
The Economic Times
Dollar retreats from 18-month high despite hot CPI as Fed officials temper hike bets
The dollar has fallen back after peaking at an 18-month high, fueled by stronger than expected inflation data. Expectations of an October rate hike were moderated by prudent remarks from Federal Reserve officials. With Treasury yields decreasing, the dollar slipped against key currencies like the euro and sterling. Traders are now closely monitoring the upcoming US producer price and retail sales figures to gauge future market movements.
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