Dollar steadies as Waller argues for more rate hikes, inflation up next
TLT•The dollar steadied after Federal Reserve Governor Christopher Waller called for a rate hike next month, with U.S. inflation data due to shape expectations. Economists polled by Reuters expected October headline inflation of 3.9% and core inflation of 2.8% year over year.
1. Fed comments support dollar
The dollar steadied on Tuesday after Federal Reserve Governor Christopher Waller said the central bank should raise short-term borrowing costs next month even if inflation cooled in October. He said the Fed should consider a half-point increase if the inflation picture worsens, and markets were fully pricing a December hike.
2. Inflation data in focus
Economists polled by Reuters expected October headline consumer inflation to rise to 3.9% and core inflation to 2.8% year over year. Analysts said a stronger reading could increase rate-hike expectations and support the dollar, while a downside surprise could extend its recent selling momentum.
3. Currencies steady after swings
The dollar was slightly firmer against the yen at 158.1, while the pound fell 0.1% to $1.3425 and the euro was flat at $1.2265. The dollar had surged after Friday’s stronger-than-expected jobs report, then fell on Monday as oil prices tumbled and stocks gained.
