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Dollar Index firms near 101.50 as Fed hike bets rise

Markets pricing shows a 47.1% chance of a Fed rate hike in October and a 92.5% probability in December, according to CME FedWatch.

Reported · Written up by our desk · Major Pairs

The US Dollar Index, DXY, was trading near 101.40 in early European trade on Wednesday, extending gains as expectations for additional Federal Reserve interest rate hikes continue to build, according to FXStreet.

The dollar was supported by rising bets for more rate increases, alongside higher US Treasury yields, as policymakers continue to signal that inflation staying above target could warrant further action.

FXStreet also cited recent comments from Fed officials, including that inflation above the central bank’s target may require policy action, and that another hike this year could be appropriate though there is no urgency after the central bank raised rates this month.

Heading into key data, FXStreet noted that markets were looking ahead to US releases including ADP employment and PCE, with CME FedWatch Tool data showing a 47.1% chance of a rate hike in October and a 92.5% odds of an increase in December.

Latest closeDollar index 101.25 ▲0.3%

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