Dollar rises to 19-month high as Fed hike bets grow, yen wobbles
TLT•The dollar index rose 0.11% to 102.98, its highest since April 2025, as stronger-than-expected October U.S. inflation and hawkish Fed remarks boosted rate-hike bets. The dollar eased 0.03% to 159.74 yen after earlier reaching a more than two-month high against the Japanese currency.
1. Fed bets support dollar
The dollar rallied to a 19-month high against major peers on Thursday as traders increased bets on further Federal Reserve rate hikes after stronger-than-expected October inflation data and hawkish comments from U.S. central bank officials. Officials left open the possibility of a 50-basis-point increase, and some brokerages, including Goldman Sachs, expect another hike early next year in addition to one in December.
2. Yen swings against dollar
The dollar index rose 0.11% to 102.98, its highest since April 2025. The euro fell 0.08% to $1.108 and sterling weakened 0.16% to $1.3259. Against the yen, the dollar eased 0.03% to 159.74 after touching a more than two-month high earlier in the day.
3. Japanese rate signals
Bank of Japan board member Toichiro Asada said premature rate hikes could hurt growth and push down underlying inflation. Japan's top currency diplomat Atsushi Mimura warned it was "too early to forget" summer intervention. Japan's annual wholesale inflation accelerated to 7.1% in October from 6.8% in September, while analysts in a poll expected the next BOJ rate hike as soon as next month.
