US dollar flat against peers after softer-than-expected inflation data
TLT•The US dollar was flat against major currencies after August’s PCE price index rose 0.3%, below the 0.4% forecast. Traders priced a 37% chance of an October Fed rate hike, down from 70% a week earlier.
1. Inflation and rate bets
The dollar was flat against major currencies after US data showed the Personal Consumption Expenditures Price Index rose 0.3% in August, below economists’ 0.4% forecast. Traders priced a 37% probability of a Fed rate hike in October, down from 70% a week earlier.
2. Yields and currencies
US Treasury yields fell across the board initially; the two-year yield was last down 0.4 basis points at 4.885%. The euro was flat at $1.133050 and remained on track for a monthly loss against the dollar, while the dollar index was flat at 101.47 and headed for a September gain.
3. Oil and other currencies
Brent November futures rose 0.92% to settle at $103.53 a barrel as US-Iran talks aimed at ending the war stalled. Sterling strengthened 0.26% to $1.3265, while the Australian dollar weakened 0.57% to $0.6948.
