US Dollar: Inflation Data Revisions Dampen Expectations for Fed Hike in October

Deutsche Bank's analysts have downplayed expectations for an October US Federal Reserve interest rate hike following softer inflation data revisions. The Dollar Index rose despite this, but market pricing for a year-end tightening was nudged lower.

The bank's economists see the reduced urgency to act in October, although they still expect a December hike. This comes after NY Fed President Williams' comments on Tuesday that tempered expectations of an October rate increase.

Market pricing for an October hike fell from 47% on Tuesday to 37% by the close last night, while the amount of hikes priced by year-end decreased by -2.5bps to 29.6bps.