US inflation numbers pushes US dollar up
The US dollar index is trading close to the level reached during the previous session, when it gained more than 1.5 percent. The greenback found support as traders moved to price-in updated expectations on the pace of the Fed’s monetary policy tightening. The US inflation numbers for August released yesterday surprised to the upside. This higher-than-expected rise in consumer prices is behind the dollar gains recorded yesterday, as many believe that it may create scope for an even more aggressive Federal Reserve. The American central bank, through many of its senior officials, has been broadcasting the intention to control inflation, while also signalling that lower growth and more unemployment will be short term pains it is prepared to accept. Against this background, and with the Fed rate decision due next week, many investors now believe that the US central bank may hike rates by a full percentage point.
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