Dollar Gains after U.S. Data Boosts Bets on Fed Rate Increase

The U.S. dollar reached a two-week high against a basket of major currencies as U.S. consumer prices increased more than initially expected during August, which boosted expectations regarding a potential Federal Reserve interest rate hike this 2016. The dollar index last traded as high as 96.108, its strongest level since Sept. 1.

The data regarding the increase in U.S. consumer prices indicated a steady rise of inflation which makes the Fed eligible for a Fed rate hike this year. The core CPI was up by 2.3 percent in the 12 months until August. U.S. short-term interest rate futures are currently indicating a 55 percent likelihood of an interest rate hike by December, according to CME Group's FedWatch Tool.

The U.S. dollar against the Japanese yen eased by 0.1 percent to 102.20 yen while the euro was steady at $1.1160.

News are provided by InstaForex