Dollar Edges Higher as Inflation Data Boosts Rate Hike Expectations

The US dollar strengthened against major peers on Friday after inflation data showed higher consumer prices. The Labor Department reported that the Consumer Price Index (CPI) increased by 0.4% in August, following a 0.1% rise in July.

In the 12 months through August, consumer inflation advanced 3.4%, matching the same margin seen in July. This data reinforced expectations of a Federal Reserve interest rate increase next week.

The dollar rose broadly against the euro and Swiss franc before giving back some gains immediately after the data release. The euro was down 0.07% at $1.1602, while the dollar strengthened 0.2% to 0.814 against the Swiss franc.