The dollar strengthened against major currencies as traders raised the probability of a 25-basis-point December Federal Reserve rate hike to 87%, from about 70% a month earlier. The dollar index rose 0.63% to 102.85, its highest since April 2025.
The dollar strengthened against major currencies as expectations grew that the Federal Reserve will raise interest rates after hotter-than-expected October inflation data and hawkish remarks from policymakers. Traders priced an 87% chance of a 25-basis-point hike in December, up from about 70% a month earlier.
The dollar index rose 0.63% to 102.85, its highest since April 2025. The euro fell 0.61% to $1.11, its lowest since May 2025, while the dollar rose 0.69% against the yen to 159.83 and 0.86% against the Swiss franc to 0.832.
Recent comments from Federal Reserve officials, including Governor Christopher Waller and Dallas Fed President Lorie Logan, signaled unease over high inflation and the possibility of a 50-basis-point hike. Goldman Sachs now expects rate increases in December and March, while Deutsche Bank expects increases in December, January and March.
