Dollar Approaches 18-Month High
The dollar index strengthened to around 101.5 on Thursday, nearing its highest level since April 2025 as Treasury yields climbed to multi-decade highs amid concerns that persistent energy-driven inflation could lead to tighter monetary policy. The 10- and 30-year US Treasury yields traded around 5.3% and 5.64%, respectively, with both reaching levels not seen since 2002. Oil prices remain elevated as the US and Iran fail to make headway in negotiations despite signs of a recovery in Middle East flows, raising inflationary risks. Meanwhile, data released Wednesday showed the US PCE price index rose 0.3% in August, below expectations for a 0.4% increase, while core PCE advanced 0.2%, also below forecasts of 0.3%. Markets now see roughly a 38% chance of a Federal Reserve rate hike in October, down from 51% before the PCE data. Investors now turn to the latest weekly jobless claims on Thursday and the September jobs report on Friday.
5 on Thursday, nearing its highest level since April 2025 as Treasury yields climbed to multi-decade highs amid concerns that persistent energy-driven inflation could lead to tighter monetary policy. 64%, respectively, with both reaching levels not seen since 2002. Oil prices remain elevated as the US and Iran fail to make headway in negotiations despite signs of a recovery in Middle East flows, raising inflationary risks. 3%.
Markets now see roughly a 38% chance of a Federal Reserve rate hike in October, down from 51% before the PCE data. Investors now turn to the latest weekly jobless claims on Thursday and the September jobs report on Friday.