Dollar retreats from 18-month high despite strong inflation data
TLT•The dollar index fell 0.44% to 102.00 after reaching an 18-month high, as bond yields eased and investors weighed cautious Federal Reserve comments against strong US inflation and retail sales data. Traders saw a 72% chance of no rate change at the Fed’s October 27-28 meeting, up from 53% a month earlier.
1. Dollar pulls back
The dollar retreated from an 18-month peak as investors looked past strong US inflation and spending data and focused on a shakeout in securities of AI data center firms. US producer prices posted their biggest rise in 4-1/2 years in September, retail sales rose more than expected, and weekly jobless claims edged up.
2. Fed rate expectations ease
Government bonds rallied and the dollar fell after Federal Reserve officials said the central bank could wait for more clarity before its October 27-28 meeting. Traders put the chance of unchanged rates at 72%, compared with 53% a month earlier. The euro rose 0.48% to $1.1210, while sterling gained 0.45% to $1.3251.
