Dollar rises to 19-month high as Fed hike bets grow, yen softens
TLT•The dollar index rose 0.15% to 103.02, its highest since April 2025, as stronger October U.S. inflation and hawkish Fed comments boosted expectations for a December rate hike and another early next year. The dollar traded at 159.83 yen after reaching a more than two-month high.
1. Fed hike bets lift dollar
The dollar climbed to a 19-month high against major peers on Thursday as traders increased bets on Federal Reserve rate hikes following stronger-than-expected October inflation data and hawkish remarks from U.S. central bank officials. The dollar index rose 0.15% to 103.02, its highest since April 2025. Some major brokerages, including Goldman Sachs, now expect a further hike early next year in addition to one in December.
2. Yen nears 160 per dollar
The dollar traded 0.04% higher at 159.83 yen after reaching a more than two-month high earlier in the session. Bank of Japan board member Toichiro Asada said premature rate hikes could hurt growth and depress underlying inflation. Japan's top currency diplomat Atsushi Mimura warned it was “too early to forget” intervention, while Asada's remarks renewed pressure on the yen.
3. Japan inflation accelerates
Japan's annual wholesale inflation rose to 7.1% in October from 6.8% in September. Many analysts in a poll expect the BOJ's next rate hike as soon as next month.
