Market Jitters Over Fed Policy Drive Dollar Higher

10 Oct 2024 , 10:08 AM

The US dollar traded around a two-month high against major rivals on Thursday, as investors gained confidence in the Federal Reserve’s gradual approach to further monetary easing, despite the fact that a critical inflation report was due later in the day.

The euro fell to its lowest level since August 13, while the dollar remained near its highest level since August 15.

Mary Daly, President of the San Francisco Federal Reserve, stated late Wednesday that she is more concerned about damaging the labour market than surging inflation.

The dollar index was little changed at 102.86, remaining close to Wednesday’s high of 102.93.

The dollar fell 0.18% to 149.035 yen, but it remained close to the overnight peak of 146.365.

The dollar index, which measures the currency against six key rivals, remained stable after reaching its highest level since August 16 overnight, as traders reduced their bets on US interest rate reduction this year in the wake of last week’s surprisingly good payrolls report.

September’s consumer price index (CPI), due at 1230 GMT, is projected to show core inflation maintaining steady at a 3.2% year-on-year rate, according to economists polled by Reuters.

According to the CME Group’s FedWatch Tool, traders place 80% of their bets on the Fed reducing rates by a quarter point at its next policy decision on November 7, against 20% on no change. A day earlier, the possibility of a cut was 85%.

For feedback and suggestions, write to us at [e-mail]