FOREX-Dollar jumps after unexpected rise in US consumer prices

By Caroline Valetkevitch

NEW YORK, September 13 (Reuters)The dollar rallied against the yen, euro and other currencies on Tuesday after stronger-than-expected US inflation data boosted investor bets that the Federal Reserve will need to remain aggressive in raising interest rates. ‘interest.

The dollar index =USD, which tracks the greenback against its peers, rose 1.5% to 109.85 and hit a one-week high, heading back towards last week’s peak at 110.79. The index turned positive after the data was released.

euro EUR=EBSbook GBP=D3 and yen JPY=EBS all greatly weakened. The euro was last down 1.5% against the greenback at $0.9973, after hitting a near-month high of $1.0198 in the previous session. The euro has traded below parity in 16 of the last 17 sessions.

According to the Labor Department report, US consumer prices rose unexpectedly in August and core inflation accelerated amid rising rent and health care costs.

“The data was much stronger than expected. What is particularly worrying is the fact that core inflation came in at nearly double estimates,” said Karl Schamotta, chief market strategist at Corpay in Toronto. .

“This will end the idea of ​​transitory inflation for the time being and anchor US yields and the dollar substantially higher. The bottom line here is that we are now looking at almost certain probabilities on a 75 bp move base. the week.”

After the report, interest rate futures traders dropped all lingering bets on Fed policymakers slowing their pace of rate hikes when they meet next week. They piled into bets on a third consecutive 75 basis point hike that would take the Fed’s current range of key rates from 2.25% to 2.5% to 3% to 3.25%, and contracts rates now also reflect about a one-in-four chance of a full surprise – percentage point increase at the September 20-21 meeting.

The dollar had eased in recent sessions after its sharp rise, while the euro had gained in recent sessions following hawkish rhetoric from the European Central Bank.

Against the yen, the dollar was last up 1.2% at 144.51. Earlier, the Japanese currency found support in comments from officials signaling that the government may take steps to counter excessive yen weakness.

The British pound was also down against the dollar. The pound was last down 1.6% at $1.1499. Earlier today it hit a two-week high after Britain’s unemployment rate fell to its lowest level since 1974, while non-bonus wages rose by 5.2%, the highest rate for the three months until August 2021.

In cryptocurrencies, bitcoin BTC=BTSP last fell 9.48% to $20,277.00, while ether ETH=BTSP was down 6.8% at $1,600.

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Currency Bid Rates at 4:08 p.m. (2008 GMT)

The description

RIC

Last

Closing of the previous session

Percentage change

Percentage change since the beginning of the year

High bid

Low bid

dollar index

= USD

109.8500

108.2200

+1.53%

14.830%

+109.8900

+107.6700

euro dollar

EUR=EBS

$0.9973

$1.0122

-1.47%

-12.27%

+$1.0188

+$0.9970

dollar/yen

JPY=EBS

144.5050

142.8200

+1.19%

+25.53%

+144.6750

+141.6050

Euro/Yen

EURJPY=

144.12

144.58

-0.32%

+10.59%

+145.0300

+144.0400

Dollar/Swiss

CHF=EBS

0.9616

0.9539

+0.83%

+5.45%

+0.9632

+0.9482

British pound/dollar

GBP=D3

$1.1499

$1.1683

-1.56%

-14.97%

+$1.1738

+$1.1497

Canadian dollar

CAD=D3

1.3167

1.2985

+1.41%

+4.14%

+1.3174

+1.2954

Australian/Dollar

AUD=D3

$0.6733

$0.6889

-2.26%

-7.37%

+$0.6916

+$0.6726

Euro/Switzerland

EURCHF=

0.9591

0.9652

-0.63%

-7.50%

+0.9677

+0.9585

Euro/pound sterling

EURGBP=

0.8671

0.8662

+0.10%

+3.23%

+0.8694

+0.8649

New Zealand Dollar/Dollar

USD=D3

$0.5992

$0.6137

-2.38%

-12.47%

+$0.6161

+$0.5987

Dollar/Norway

NOK=D3

10.1080

9.8455

+2.71%

+14.79%

+10.1185

+9.8185

Euro/Norway

EURNOK=

10.0824

9.9616

+1.21%

+0.69%

+10.0908

+9.9547

Dollar/Sweden

SEK=

10.6915

10.4874

+0.61%

+18.56%

+10.6979

+10.4140

Euro/Sweden

EUREK=

10.6645

10.5996

+0.61%

+4.21%

+10.6708

+10.5995

World exchange rateshttps://tmsnrt.rs/2RBWI5E

(Reporting by Caroline Valetkevitch in New York; additional reporting by Samuel Indyk in London; Editing by Ana Nicolaci da Costa, Chizu Nomiyama and Jonathan Oatis)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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