Dollar Hits Eight-Day High Amid Fed Hike Bets and Bank of Japan Speech

The US dollar reached an eight-day high on Thursday after the release of inflation data from the Commerce Department. The Personal Consumption Expenditures Price Index rose 3.7% in the 12 months through July, matching expectations and slightly above the estimate.

This development has lifted bets for a Federal Reserve rate hike by year-end, but Westpac economist Ryan Wells notes that Chairman Kevin Warsh's speech at Jackson Hole will be the ultimate test of these expectations.

The dollar index rose 0.21% to 99.13, its highest level since August 19. Against the yen, the dollar traded at 159.23, still well off a multi-decade low of about 164.

Ryozo Himino's speech and press conference as one of the Bank of Japan's deputy governors are also being closely watched for clues on the likelihood of a September rate hike and any tightening path thereafter.