The US dollar was strong against its major rivals today as the inflation reading beat expectations, adding fuel to speculations about eventual interest rate hike from the Federal Reserve.
The Consumer Price Index rose 0.2% in August, beating market expectations of a 0.1% increase. Meanwhile, the Consumer Sentiment Index reported by the University of Michigan remained stable at 89.8 in September. While it was a bit disappointing as experts had promised a small increase, the reading was not particularly bad, meaning it did not hurt the dollar much.
Most specialists do not believe that the Fed will hike interest rates next week. But it looks like such view does not harm the US currency much anymore. Perhaps, traders prefer to look at the bigger picture, willing to buy the greenback in anticipation of monetary tightening sometime down the line.
EUR/USD dropped 1.1242 to 1.1160 as of 15:46 GMT today. GBP/USD tanked as much as 1.2% from 1.3237 to 1.3083. USD/CHF jumped from 0.9717 to 0.9796.
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