Dollar rises near two-month high as Fed bets ease hike ahead of inflation data By Reuters
Written by Kevin Buckland
TOKYO (Reuters) – The U.S. dollar traded near a two-month high against major peers on Thursday as markets grew more confident about a patient approach from the Federal Reserve to improve monetary conditions, as a key inflation report is due later in the day.
which rates the coin against six key rivals, was stable after rising to its highest since Aug. 16 overnight, as traders continued to pay off bets for a US interest rate cut this year due to last week’s unexpected ratepayer data.
September’s consumer price index (CPI), due at 1230 GMT, is likely to show core inflation holding steady at an annual clip of 3.2%, according to economists polled by Reuters.
The euro has lost the most strength since Aug. 13, while against the yen, the dollar is close to its strongest level since Aug. 15.
“Special US trade” has reignited after strong jobs data recently, said Kyle Rodda, senior financial markets analyst at Capital.com, with the minutes of the Fed’s latest meeting – released overnight – confirming the central bank’s focus. keeping the labor market healthy.
“The US dollar is once again strong, … mainly due to the continued good performance of the US economy”, said Rodda.
At the same time, “an adverse surprise in the US CPI could force the Fed to question its confidence about the path of inflation.”
San Francisco Fed President Mary Daly said Wednesday night that she is less concerned about resurgent inflation than it is about hurting the labor market.
Traders are placing an 80% chance on the Fed cutting rates in a quarter at its next policy decision on Nov. 7, compared to a 20% chance of no change, according to CME Group’s (NASDAQ: ) FedWatch tool. The previous day, the probability of being cut stood at 85%.
The dollar index was little changed at 102.86 as of 0024 GMT, clinging to Wednesday’s high of 102.93.
The greenback fell 0.18% to 149.035 yen, but was not far from the overnight high of 146.365.
The euro was lower at $1.0939 following its dip at $1.0936 in the previous session.
The Australian dollar (AUD=D3> fell 0.07% to $0.6714, retreating from Wednesday’s low of $0.6708, the weakest level since Sept. 16, after a stimulus announcement from top trading partner Country planner China went down a little.
China’s Ministry of Finance is expected to hold a press conference on monetary policy on Saturday.
The New Zealand dollar added 0.07% to $0.6067, trying to put some distance from the $0.6053 low from Wednesday, when the central bank cut rates by half and said it would continue to improve, causing a sharp slide in the currency.
