Dollar gains 0.47 percent to 0.817 against Swiss franc as US CPI hits three-month acceleration
The dollar strengthened against major peers after the US Consumer Price Index rose 0.4 percent, marking the fastest monthly increase in three months and reinforcing market bets for a Federal Reserve rate hike.
The US dollar climbed on Friday following US Bureau of Labor Statistics data showing the Consumer Price Index increased 0.4 percent in August. This represents the quickest acceleration in inflation prices over the past three months, up from the 0.1 percent rise recorded in July. Annual CPI inflation held steady at 3.4 percent, matching July's reading. Core CPI, excluding food and energy costs, climbed 2.4 percent year-over-year compared to 2.5 percent in the prior month.
Market reaction saw the dollar advance 0.47 percent against the Swiss franc, continuing a third consecutive weekly gain against that currency. The euro dipped 0.13 percent at $1.15950. These moves occurred as investor sentiment remained fragile amid an escalating conflict involving Iran pushing oil prices higher.
Juan Perez of MonexUSA noted that accelerating core CPI tends to increase the probability of Federal Reserve interest rate hikes. CME's FedWatch tool indicated a 86 percent chance of a 25 basis-point rate increase at the September 16 meeting, up from 72 percent the previous day. US Treasury yields remained near multi-year highs, with the two-year yield continuing its upward trajectory.
