Dollar Soars as US Data Bolsters Rate Hike Bets Ahead of Jackson Hole

The US dollar has reached an eight-day high on August 27, driven by the latest US economic data that slightly lifted expectations of a Federal Reserve rate hike. The data showed the Personal Consumption Expenditures Price Index rose 3.7% in the 12 months through July, matching June's figure and exceeding economists' estimates.

The dollar index, which measures the greenback against a basket of currencies including the yen and euro, rose 0.21% to 99.13, its highest level since August 19. Against the yen, the dollar traded at 159.23, well off its multi-decade low but still lower than traders were expecting.

Markets are awaiting a speech by Bank of Japan deputy governor Ryozo Himino on Thursday for clues on the likelihood of a September rate hike and the size of any tightening path thereafter. Money markets are pricing in an 87% chance of a rate hike by the BOJ next month, according to data from money market broker Totan Tanshi.