Dollar strengthens after US inflation data boosts Fed rate-hike expectations
TLT•The dollar rose after US consumer prices increased 0.4% in October, above the 0.3% forecast. Markets priced in an 89% chance of a Federal Reserve rate hike in December.
1. Inflation lifts dollar
The dollar strengthened against major currencies after hotter-than-expected US inflation data bolstered expectations that the Federal Reserve would raise borrowing costs next month. The Consumer Price Index rose 0.4% in October, exceeding the 0.3% consensus forecast.
2. Currency moves
The dollar index rose 0.51% to 102.20, while the two-year Treasury yield gained 19.07 basis points to 4.738%. The euro fell 0.48% to $1.117 and the yen fell 0.47% to 158.66 per dollar; the Australian dollar lost 1% and the New Zealand dollar weakened 0.59%. Markets priced in an 89% chance of a December rate hike.
