Dollar Stabilizes as Inflation Data Pares Hike Expectations

The US dollar remained steady against its major counterparts on September 30th after a lower-than-expected inflation reading. The greenback has been strengthening in tandem with rising US Treasury yields, driven by growing expectations of additional Federal Reserve interest rate hikes.

However, the data released earlier in the day showed that the Personal Consumption Expenditures Price Index, the Fed's preferred inflation gauge, rose only 0.3% last month, below economists' forecast of a 0.4% increase.

This softer-than-expected print led to a decrease in market bets on an interest rate hike from the Federal Reserve, with traders now pricing a 37% probability of a Fed rate hike in October, down from 70% a week ago.