Dollar hits 19-month high as hot US inflation revives Fed hike bets
What's new: traders fully priced in a December quarter-point move and began assigning slim odds to a 50-basis-point increase.
The US dollar climbed to its highest level in about 19 months after stronger-than-expected October inflation and hawkish Federal Reserve comments pushed investors to bet on more rate increases. The dollar index rose as high as 102.88 on Thursday after gaining 0.5% on Tuesday, while the yen weakened near 160 per dollar and the euro slid to about $1.1067, its lowest since May 2025. Fed Governor Christopher Waller backed a December rate increase and left room for a larger move if inflation worsens. Markets now fully price a 25-basis-point hike next month, with some brokerages including Goldman Sachs and Deutsche Bank raising expectations for additional moves in early 2027.