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Dollar slips as Fed hold hopes lift Dow near 53,750

The Dollar Index is around 99.0, while the 10-year Treasury yield eases to about 4.75% after topping 4.81% Wednesday.

Reported · Written up by our desk · Major Pairs

The Dow Jones Industrial Average traded Thursday near 53,750, up 1.3% and on track for its strongest session since early August, after a Federal Reserve governor said he would be inclined to support holding rates at the September 15 to 16 meeting if upcoming inflation data continues to show disinflation.

FXStreet said the market treated the governor’s conditional language as a verdict. FedWatch pricing shifted, with hike odds at 50.4% versus 49.6% for a hold, after the gap was wider on Wednesday, and the 10-year Treasury yield backed off from a multi year high.

The report linked the rate repricing to signs of easing inflation, noting the three-month annualized PCE rate fell to about 3.05% from 4.76% in February, and the only major inflation readings before the meeting are the PPI on September 10 and CPI on September 11.

In FX markets, the Dollar Index was near a one-week low around 99.00, even as it warned that some of the equity strength was being borrowed from the bond market, with the Yen rising to a one-month high ahead of a September 18 Bank of Japan decision expected by the market to include a hike.

Latest closeDow Jones 53,061.95 ▲0.6%|Dollar index 99.58 ▼0.1%

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