The US Dollar remains resilient above 102.30 as October inflation data fuels expectations for a December Fed rate hike, pushing Treasury yields to 5% and pressuring gold and the Euro.
October CPI (0.4%) and core CPI (0.3%) both beat expectations, lifting the dollar over 0.5% on Tuesday and pushing the USD Index above 102.30. Fed rate-hike odds for December climbed above 85% from about 80%, a hawkish repricing that supports further dollar strength, though no high-impact data is due Wednesday.
Gold lost more than 2.5% on Tuesday after the hotter-than-expected CPI boosted the dollar and Fed hike odds rose above 85%, which raises the opportunity cost of holding gold. It held above $4,000 and bounced to around $4,060 early Wednesday, but the hawkish repricing keeps near-term pressure bearish.
The benchmark 10-year yield gained more than 2% on the day and holds near 5% early Wednesday after the hot October CPI print raised Fed hike odds above 85%. Sticky inflation and Commerzbank's warning that inflation may not ease until 2027 argue for sustained upward pressure on yields.
The pair fell more than 0.5% on Tuesday after hotter-than-expected US CPI lifted the dollar, erasing much of Monday's gains and hovering around 1.1150. With Fed hike odds above 85% and only ECB speeches scheduled Wednesday, downside pressure from broad USD strength may persist.
The pair rose more than 0.5% on Tuesday and is stretching higher toward 159.00 early Wednesday, its highest level in nearly a month, driven by hawkish Fed expectations after hot CPI. The strong-dollar trend keeps the momentum in the pair's favour.
The US Dollar maintains strength on Wednesday following a hot October inflation report that pushed the USD Index above 102.30. With October CPI and core CPI rising 0.4% and 0.3% respectively, markets have priced in an 85% probability of a Federal Reserve rate hike in December. Consequently, the 10-year Treasury yield remains near 5%, while gold and EUR/USD face downward pressure from the hawkish repricing.
US inflation data for October came in above expectations, raising the probability of a Fed rate hike in December above 85% and pushing the USD Index up more than 0.5% on Tuesday to above 102.30.
Above-consensus US inflation data raised expectations of a December Fed rate hike above 85%, strengthening the dollar and making interest-bearing assets more attractive than gold, which lost more than 2.5% on Tuesday.
Hotter-than-expected October inflation lifted expectations of a December Fed rate hike above 85%, pushing the 10-year yield up more than 2% on the day to near 5%.
Above-consensus US CPI data boosted the dollar, dragging EUR/USD down more than 0.5% on Tuesday to around 1.1500-1.1150 territory, erasing much of Monday's gains.
Early Wednesday the pair is stretching higher toward 159.00, its highest level in nearly a month, after gaining more than 0.5% on Tuesday.