Inflation Rise Fuels Rate Hike Fears, Dollar Gains

The dollar and US Treasury yields ticked higher on Wednesday as investors digested hotter-than-expected July inflation figures, which reminded them that a Federal Reserve interest rate hike could be imminent.

US inflation rose by 0.2% month-on-month, exceeding the forecast of 0.1%, while the annual rate edged up to 3.7%. This increase was mainly driven by a 0.246% unrounded monthly rise in core inflation.

The news had little impact on Wall Street, with trading ranges remaining narrow as investors await Nvidia's quarterly results and look ahead to Federal Reserve Chair Kevin Warsh's keynote speech at Jackson Hole later this week.