As per data, U.S. consumer prices rose more than anticipated in September and underlying inflation pressures strengthened.
Digital Desk: After a shocking U.S. inflation report that raised the prospect of a 100-basis-point interest rate hike at the Federal Reserve policy meeting next month, the dollar surged against the yen on Thursday, reaching a new 24-year high.
Data revealed that U.S. consumer prices rose more than anticipated in September and that underlying inflation pressures intensified, reinforcing anticipation that the Fed will announce another rate rise of 75 basis points (bps).
The Labor Department said on Thursday that the consumer price index increased by 0.4% in September after increasing by 0.1% in August.
Reuters polled economists, and they predicted a 0.2% increase in the CPI. After increasing by 8.3% in August, the CPI grew by 8.2% for the preceding twelve months to September.
"Right now, anyone who suggests that the Fed could turn is wishing on a star. The Fed needs to control inflation immediately "said Arthur Laffer, CEO of Nashville, Tennessee-based Laffer Tengler Investments.
"The more they hike rates, the more a soft landing seems like wishful thinking. The fourth quarter will be extremely weak, perhaps even negative."
Fed funds futures have placed a 13% possibility of a 100-bps rate hike in response to the data.
The dollar increased to its highest level since August 1998, reaching 147.57 yen. It last increased by 0.4% to 147.49 yen.
Traders continued to watch for Japanese action to support the faltering yen. Officials have stated again that they are prepared to take the necessary action to stop excessive currency movements, although it is still unclear whether they aim to defend specific levels.
The dollar rose against the Swiss franc as well, reaching its highest level since May 2019. The dollar last increased by over 1% to 1.0068 francs.
In comparison to the euro, which fell to a two-week low, the dollar also increased. The euro last traded at $0.9659, down 0.6%.
Leave A Comment