By Laura Matthews and Sruthi Shankar <\/p>\n
NEW YORK\/BANGALORE Oct 14 (Reuters) – The US dollar hit an 18-month high on Wednesday after stronger-than-expected inflation data revived expectations for a Federal Reserve interest rate hike later this month, highlighting concern that price pressures are broadening \u200cacross the economy. <\/p>\n
The Labor Department’s Bureau of Labor Statistics said on Wednesday that US consumer prices rose sharply in September as gasoline \u200ccosts surged. <\/p>\n
“The higher-than-expected core inflation print raises concerns that energy-driven inflation is spreading to other areas of the economy,” said Uto Shinohara, senior investment strategist at Mesirow Currency Management. <\/p>\n
“October Fed rate \u200bexpectations jumped…post-release, bringing the meeting more into play.” <\/p>\n
The US dollar index, a measure of the greenback’s strength against a basket of six currencies, rose 0.68% to 102.86, its highest since April 2025, shaking off the previous day’s losses. <\/p>\n
The report overshadowed recent dovish signals from Fed officials, including comments from New York Fed President John Williams that weakened the dollar in the previous session. <\/p>\n
On Thursday, Fed Vice Chair for Supervision Michelle Bowman also signaled a wait-and-see approach before raising rates again. <\/p>\n
Traders \u200cnow see a 56% chance that the Fed will \u2060leave rates unchanged at its October 27-28 meeting, compared with 53% a month ago, while pricing in about 79 basis points of tightening by late 2027, CME Group’s FedWatch Tool showed. <\/p>\n
“Inflation was hotter. It was more broad-based, so certainly \u2060not a one-off type situation, which allows those that are more dovish to ignore it,” said Marvin Loh, senior global market strategist at State Street in Boston. “I think the Fed ultimately is going to need to have a serious conversation around it.” <\/p>\n
The US central bank raised its policy rate by a quarter of a percentage point to \u200bthe \u200b3.75%-4.00% range last month. <\/p>\n
Fed official Thomas Barkin is scheduled to speak later in the \u200bday. Additionally, the Fed publishes its monthly Beige Book. <\/p>\n
EURO TROUBLES <\/p>\n
A \u200chost of global finance chiefs are in Bangkok, where the International Monetary Fund and World Bank are holding annual meetings. <\/p>\n
IMF fiscal affairs chief Rodrigo Valdes said the body has “dialed up” the urgency of its call for governments to rein in growing debts, while the IMF’s Kristalina Georgieva said the US needs to make fiscal adjustments to put its debt on a more sustainable path. <\/p>\n
French bonds have been among the worst hit by a recent global selloff, with investors concerned that political jostling ahead of next year’s presidential election may hinder efforts to reduce its high deficit. <\/p>\n
The ECB’s Lagarde said at a CNN event in Bangkok \u200cthat France should solve its debt woes through fiscal consolidation, damping speculation about whether the \u200bcentral bank might start buying French bonds to contain yields. <\/p>\n
The euro fell 0.69% to $1.1121, hitting \u200ba new 17-month low against the dollar and a fresh 16-month \u200blow versus sterling as a rise in oil prices and lingering concerns about France’s fiscal health continued to weigh \u200con the single currency. <\/p>\n
Roberto Mialich, FX strategist at Unicredit, said \u200bthe euro could test $1.10 in the near \u200bterm but was less bearish on the currency into year-end, expecting that “bond yield in the US will probably ease, although the situation in the euro zone could weigh on the euro.” <\/p>\n
The Financial Times reported on Wednesday that British finance minister John Healey is expected to pay for \u200ball new giveaways in this month’s budget with higher \u200ctaxes or spending cuts, rather than more borrowing. <\/p>\n
The IMF is not recommending that Britain speed up its fiscal consolidation, a senior official \u200bof the body said. <\/p>\n
Sterling fell 0.58% to $1.3178. The Japanese yen weakened 0.33% to 158.81 per dollar. <\/p>\n
(Reporting by Laura Matthews in New \u200bYork, Rocky Swift and Sruthi Shankar; Editing by Jan Harvey and Colin Barr) <\/p>\n","protected":false},"excerpt":{"rendered":"By Laura Matthews and Sruthi Shankar NEW YORK\/BANGALORE Oct 14 (Reuters) – The US dollar hit an 18-month…\n","protected":false},"author":2,"featured_media":882169,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[5097,28,122,101,939,2993,2994,32455,2995,932,32456,20112,147,9323,1170,1666,6480,2996,2997,923,19533,3733,32457],"class_list":["post-882168","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-401k","tag-business","tag-business-news","tag-economy","tag-finance","tag-financial-information","tag-investing","tag-investment-tools","tag-investor","tag-market-news","tag-mortgage","tag-mutual-funds","tag-personal-finance","tag-quote","tag-real-estate","tag-retirement","tag-stock","tag-stock-research","tag-stock-valuation","tag-stocks","tag-suze-orman","tag-tax","tag-track-portfolio"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/882168","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=882168"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/882168\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/882169"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=882168"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=882168"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=882168"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}