Home / Business and Economy / Dollar Surges on Inflation Data, Eyes Fed Hike
Dollar Surges on Inflation Data, Eyes Fed Hike
27 Aug
Summary
- US inflation edged up slightly in July, fueling Fed rate hike expectations.
- BOJ Deputy Governor Himino's speech is key for September rate hike signals.
- The dollar index reached an eight-day high amid economic data releases.
The U.S. dollar reached an eight-day high on Thursday, influenced by recent economic data indicating a slight uptick in inflation. The Personal Consumption Expenditures Price Index rose 3.7% year-on-year in July, matching June's figure and exceeding economists' forecasts. This reading has kept the possibility of a Federal Reserve rate hike by year-end alive, with attention now turning to Chairman Kevin Warsh's speech at the Jackson Hole symposium.
Traders are also closely monitoring a speech by Bank of Japan Deputy Governor Ryozo Himino. His remarks are expected to provide crucial signals regarding the likelihood and scope of a potential rate hike in September. Money markets are currently pricing in an 87% chance of such an action by the BOJ next month.
Meanwhile, other currency markets saw mixed movements. The Canadian dollar held steady against the greenback amidst ongoing trade tensions with the United States. The euro traded around $1.1655, and the British pound remained stable at $1.3592. The Australian and New Zealand dollars experienced modest gains against the U.S. dollar.
