Dollar Gains as Inflation Data Bolsters Rate Hike Bets

The US dollar rose by its most in over two weeks, recouping about half of its losses after Treasury Secretary Scott Bessent's surprise move to prop up the bond market last week.

The Bloomberg Dollar Spot Index increased by 0.2% on Wednesday, with its biggest gain since August 10.

This comes as inflation data showed that the personal consumption expenditures price index rose at a 3.7% annual pace in July, nearly twice the Federal Reserve's target.

Nathan Thooft at Manulife Investment Management said the PCE figures were 'firm enough to remind investors that inflation hasn't fully disappeared.'