Dollar Rises on Hot PCE Inflation, Fed Rate-Hike Bets Return
· Business · LiveMint, Economic Times, Wall Street Journal
The US dollar posted its biggest gain in over two weeks after the personal consumption expenditures (PCE) price index showed inflation continuing at a 3.7% annual pace in July, nearly double the Fed's 2% target. Traders are now pricing in a roughly 40% chance of a rate hike at next month's Fed meeting, with a quarter-point increase fully expected by December. The Bloomberg Dollar Spot Index rose 0.2%, clawing back about half of the losses triggered last week when Treasury Secretary Scott Bessent unveiled plans to step up government bond purchases. The yen weakened to 159.45 per dollar, while the New Zealand dollar and Swiss franc were among the worst performers.
Why it matters
A firmer dollar and revived rate-hike expectations could pressure the Indian rupee, raise the cost of imported oil and electronics for Indian consumers, and complicate the RBI's rate-cut timing.
Read the original report — LiveMint
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