Greenback stands tall after American data bolsters Fed rate lift bets
On Monday, the evergreen buck traded close to a two-week peak against a basket of key currencies after American consumer prices edged up more than expected in August, thus spurring expectations that the Federal Reserve would increase interest rates already this year.
The dollar index, that evaluates the greenback's actual value against six major currencies, was last worth 95.984, having soared to as high as 96.108 on Friday, the greatest value since September 1.
In August, American consumer prices edged up more than expected, Friday’s data revealed, thus pointing to a steady build-up of inflation, which could enable the Fed to increase interest rates this year.
The core CPI, stripping out food and energy costs, ascended 0.3% the previous month, the biggest surge since February. The core CPI gained 2.3% in the 12 months through August.
American short-term interest rate futures are currently implying a 55% probability of the Fed increasing interest rates by December, compared to approximately 47% on before the CPI data, as CME Group's FedWatch Tool informs.