Dollar rises to 19-month high as Fed hike bets grow, yen softens
The US dollar reached a 19-month high as strong inflation data led markets to anticipate further interest rate hikes from the Federal Reserve. Economists and strategists suggest that persistent inflation may force the Fed to continue tightening monetary policy into early 2026.
Why it matters
Fluctuations in the dollar and Fed interest rate policy significantly impact global currency markets, borrowing costs, and international trade stability.
FILE PHOTO: Japanese 10,000 yen and 1,000 yen banknotes are displayed in this illustration taken October 20, 2026. REUTERS/Kim Kyung-Hoon/Illustration/File Photo
Nov 12 : The dollar edged lower on Thursday after reaching the highest level in about 19 months earlier in the session as strong inflation data triggered a hawkish repricing of the Federal Reserve's rate path, driving short-dated US Treasury yields sharply higher.
US central bank officials expressed concern over stubborn inflation and left open the possibility of a 50-basis-point increase, with Fed Governor Christopher Waller saying he planned to support a quarter-point increase at the Fed's December 8-9 meeting unless core CPI came in at 0.3 per cent or more.
Some brokerages, including Goldman Sachs, now expect another hike early next year, in addition to one in December.
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