Dollar Holds Near Eight-Day High on Strong US Inflation Data

The US dollar held near its eight-day high on Thursday after fresh inflation data slightly increased expectations of a Federal Reserve interest rate hike before year-end. The latest Personal Consumption Expenditures (PCE) price index rose 3.7% in the 12 months through July, beating economists' forecast of 3.6%. On a monthly basis, the PCE index increased 0.2%, compared with expectations for a 0.1% rise.

Investors are now closely watching the Jackson Hole gathering for indications about the central bank's next steps. Westpac economist Ryan Wells said the upcoming speech by Fed Chair Kevin Warsh would provide an important test of how policymakers view the inflation and interest rate outlook.