The dollar strengthened to the highest level in over a year as hot US inflation readings pushed traders to add bets that the Federal Reserve will raise interest rates. The Bloomberg Dollar Spot Index surged past its November high, rising as much as 0.4% to its highest level since May 2025. US consumer prices advanced at the fastest pace in five months on rising fuel costs, according to Bureau of Labor Statistics data. "Hotter than expected CPI has given a boost to the Dollar this morning as traders price in further tightening from the Fed," said Andrew Hazlett, a foreign-exchange trader at Monex Inc. The dollar has surged nearly 3% for the four-week period ending Oct. 9 to post its longest winning streak since early 2025.
The rally has been fueled by traders' rate predictions since the Fed raised rates for the first time in three years last month.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing