The dollar rose against the yen, euro and other currencies on Tuesday after higher-than-expected US inflation data suggested the Federal Reserve may have to remain aggressive in raising rates. of interest.
* The dollar index, which measures the greenback’s performance against a basket of six currencies, rose 1.1% to 109.39, nearing a two-decade high of 110.79 hit last week. The index changed its trend and began to operate in positive territory after the data.
* The euro, the pound and the yen fell. The euro was down 1% against the greenback at $1.0016, having hit a nearly one-month high of $1.0198 in the previous session.
* US consumer prices unexpectedly rose in August as lower gasoline prices were offset by rising rent and food costs.
* “The data was much stronger than expected. Of particular concern is the fact that core inflation almost doubled estimates,” said Karl Schamotta, chief market strategist at Corpay in Toronto.
* “This is going to kill the idea of transitory inflation for now… We are now looking at almost certain odds of a 75 basis point move next week” by the Fed, he added.
* Against the yen, the dollar rose 0.9% to 144.095 per dollar.
* The pound was down 1.2% at $1.1544. Earlier in the day, it hit a two-week high after the British jobless rate fell to its lowest level since 1974, while wages excluding bonuses rose 5.2%, the highest rate since the three months to August 2021.