Dollar Surges on US Inflation Data and Hawkish Central Bank Signals
The US dollar reached an eight-day high on August 27 after data on inflation and other economic indicators slightly increased expectations of a Federal Reserve rate hike. The Personal Consumption Expenditures Price Index rose 3.7% in the 12 months through July, unchanged from June, but above 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, having given back most of its intervention gains.
The market will be watching for clues on the likelihood of a rate hike from Bank of Japan deputy governor Ryozo Himino's speech and press conference later in the day. Money markets are pricing in an 87% chance of a rate hike by the BOJ next month.