Dollar climbs as traders raise December Fed hike bets
TLT•TLT•TLT•TLT•The dollar strengthened against major currencies as traders raised the probability of a 25-basis-point Federal Reserve rate hike in December to 87% from about 70% a month earlier. The dollar index rose 0.68% to 102.90 after reaching its highest since April 2025.
The dollar strengthened after US consumer prices rose more than expected in October for a third consecutive month and Federal Reserve officials made hawkish remarks. Traders priced an 87% chance of a 25-basis-point December rate hike, up from about 70% a month earlier, according to CME's FedWatch Tool.
The dollar rose 0.69% to 159.84 yen, while the euro fell 0.65% to $1.11, its lowest since May 2025. The pound dropped 0.50% to $1.33, and the dollar gained 0.93% against the Swiss franc to 0.833, its highest since mid-October.
The dollar index, which measures the currency against a basket of six currencies, rose 0.68% to 102.90 after reaching its highest since April 2025. Goldman Sachs expected rate hikes in December and March, while Deutsche Bank expected hikes in December, January and March.
