Strong US Data Sends USD Soaring Despite Slowing Rate Hike Expectations
The US Dollar has climbed to a fresh year-to-date high, supported by elevated US Treasury yields, as traders assess the Federal Reserve's monetary policy path following recent economic data.
US labour-market data released on Thursday showed that Initial Jobless Claims fell to 197K in the week ending September 26, below expectations of 200K and the previous reading of 198K. The four-week moving average also declined to 200K from 202.5K.
The figures follow Wednesday's ADP report, which showed that private-sector employment increased by 90K in September, beating the 70K forecast and accelerating from 36K in August. Second-quarter US Gross Domestic Product was also revised higher to an annualized rate of 2.2% from 1.5%.
However, markets have scaled back expectations that the Fed will raise interest rates this month following softer-than-expected US Personal Consumption Expenditures inflation data released on Wednesday. The CME FedWatch Tool shows that traders now see about a 36% chance that the Fed will raise interest rates at its October 27-28 meeting, down from 70% earlier in the week.