US Dollar (USD) maintained its strength following a highest daily surgesince March the day before. This was driven by robust U.S. consumer pricedata, which has rekindled expectations that the Federal Reserve might needto raise interest rates further in order to bring inflation back to itstargeted 2%.
In September, the consumer price index (CPI) increased by 0.4%, keeping theannual rate at 3.7%, consistent with August figures. Economists surveyed byReuters had predicted a 0.3% monthly gain and a 3.6% year-on-year increase.
Nicholas Van Ness, a U.S. economist at Credit Agricole CIB, noted, “Thedata will keep the Fed on alert.” While our central scenario still suggestsan extended pause until 2024, any positive surprises in future CPI andemployment reports could potentially lead to a rate hike in December orthereafter.”
Read Top Stories
The dollar index, which gauges the strength of the U.S. dollar against sixmajor currencies, inched up by 0.1% to reach 106.64, marking its highestlevel in a week. It had surged by 0.8% on Thursday, marking the mostsubstantial one-day increase since March 15.