Dollar Rallies on US Fiscal Concerns; Swiss Franc Supported by Inflation

The US Dollar (USD) has reached fresh year-to-date highs as elevated US Treasury yields and concerns about the US fiscal and debt outlook support the Greenback. The US Dollar Index, which tracks the value of the USD against a basket of six major currencies, trades around 101.75 after touching a yearly high of 101.99 earlier in the day.

The latest labour-market data released on Thursday showed Initial Jobless Claims fell to 197K in the week ending September 26, below expectations of 200K and the previous reading of 198K. The four-week moving average also declined to 200K from 202.5K.

However, markets have scaled back expectations that the Federal Reserve will raise interest rates this month following softer-than-expected US Personal Consumption Expenditures inflation data released on Wednesday. Core PCE inflation rose 0.2% MoM in August, below the 0.3% forecast, while the annual rate remained unchanged at 3.0%, undershooting expectations of 3.3%.

The Swiss Franc has steadied as stronger inflation offers some support to the currency, with annual inflation accelerating to 1.0% in September from 0.8% in August. Consumer prices were unchanged on a monthly basis after rising 0.4% previously.