Dollar Edges Higher on Inflation Data, Rate Hike Odds Rise

The US dollar strengthened after data showed a rise in consumer prices, increasing the likelihood of a rate hike by the Federal Reserve next week.

The Labor Department's data revealed that the US Consumer Price Index (CPI) increased by 0.4 percent in August, following a 0.1 percent rise in July.

CORE CPI, which excludes volatile food and energy prices, rose by 2.4 percent year-on-year in August, up from 2.5 percent in July.

Juan Perez, director of trading at MonexUSA, noted that the acceleration of core CPI 'seems to be increasing the interest rate probability or odds' of a Federal Reserve rate hike.