Dollar Index Reaches New High on Japan Rate Hike

The Dollar Index reached its highest level since late July before falling back to just above 100.30, despite Japan's Bank of Japan (BoJ) raising interest rates to 1.25% on Friday.

Seven tenths of the index is made up of central banks that raised rates in September: the European Central Bank (ECB) to 2.50%, the Federal Reserve to 3.75-4.00%, and now the BoJ. All three moved by a quarter point, with Japan's rate its highest since 1995.

The Japanese vote was 7-2 in favor of raising rates, with board members Asada and Sato dissenting due to recent inflation data showing core inflation eased to 1.7% in August from 1.8% in July.