The dollar index rose 0.3% to 103.16, its highest level since April 2025, as strong US inflation data and hawkish Federal Reserve remarks lifted rate expectations and Treasury yields. Investors priced in a 91% chance of a December rate hike.
The dollar climbed against major currencies on Thursday as investors pushed Treasury yields higher following a hawkish reassessment of the Federal Reserve’s interest-rate path. Officials warned that inflation remains elevated, and some signaled openness to a 50-basis-point increase if price pressures do not ease. Strong US inflation data released Tuesday reinforced expectations for further tightening.
The dollar index rose 0.3% to 103.16, its highest level since April 2025. Investors priced in a 91% chance of a December rate hike. The two-year Treasury yield rose 10.79 basis points to 4.835%, while the 10-year yield gained 7.94 basis points to 5.068%. Some brokerages, including Goldman Sachs, expect another hike early next year in addition to one in December.
Japan’s currency diplomat Atsushi Mimura warned that it was “too early to forget” this summer’s intervention as the yen weakened to 159.975 per dollar, its lowest level since September. The euro fell 0.28% to $1.10585, while the Australian dollar dropped 0.58% to $0.6808.
