The dollar held firm in Asian trading as markets awaited US inflation data that could strengthen expectations for rate hikes. Economists polled by Reuters expected October headline inflation of 3.9% and core inflation of 2.8%; markets priced an 85% chance of a Fed rate increase next month.
The dollar found support after several volatile sessions and held firm in Tuesday’s Asia trading as investors awaited US inflation data. A fall in oil prices and overnight stock gains had weighed on the currency as investors shifted toward riskier assets.
Economists polled by Reuters expected October headline inflation of 3.9% and core inflation of 2.8% year over year. Analysts said a hotter reading could add to rate-hike expectations and lift the dollar. After Friday’s stronger-than-expected jobs report, markets priced an 85% chance of a Federal Reserve rate increase next month.
The euro rose 0.7% to $1.1220, while the Australian dollar gained nearly 1% to $0.6921 and the New Zealand dollar traded at $0.5624. The yen hovered at 157.97 per dollar; Japan sold $97 billion in reserves to defend it through late July and August, figures released Monday showed.
