Dollar Strengthens as US Data Boosts Rate Hike Expectations

The US dollar strengthened on Wednesday following a round of economic data that slightly increased expectations for a rate hike from the Federal Reserve.

The Commerce Department reported that the Personal Consumption Expenditures Price Index rose 3.7% in the 12 months through July, unchanged from June and slightly above the 3.6% estimate from economists polled by Reuters.

This news contributed to a 0.21% rise in the dollar index to 99.12, its biggest daily gain since August 6, with the euro down 0.16% at $1.1655.

European Central Bank (ECB) board member Isabel Schnabel also stated that interest rates must rise further due to the strong euro zone economy and inflation risks.