Dollar Strengthens Ahead of Jackson Hole as Inflation Data Supports Rate Hike
The US dollar held near a one-week high on Thursday as investors awaited further clues from the Federal Reserve's policy outlook at the Jackson Hole symposium. The US dollar index remained steady at 99.15 by 00:43 ET (04:43 GMT), after rising 0.3% in the previous session.
The personal consumption expenditures price index rose 3.7% year-on-year in July, unchanged from June but above the 3.6% forecast, while prices rose 0.2% month-on-month, also stronger than expected. This reinforced the case for the Fed to keep policy restrictive.
The South Korean won was among the stronger Asian currencies, with the KRW/USD pair falling 0.3% after the Bank of Korea raised its benchmark rate by 25 basis points to 3.00%, its second straight hike. The central bank also raised its 2026 growth forecast to 3.3% from 2.6%, while keeping its inflation forecast at 2.7%. Further tightening was possible, but would likely be gradual as policymakers assess the impact of the back-to-back increases.
Markets still saw an 86% chance of a hike next month, according to the CME FedWatch tool.