Dollar Rises on Hawkish Comments from Boston Fed President Susan Collins
The U.S. dollar index (DX-Y.NYB) reached a seven-week high, rising by +0.10%, driven by hawkish remarks from Federal Reserve Bank of Boston President Susan Collins. She indicated that inflation may remain above the central bank's 2% target for some time and suggested support for further monetary tightening. This stance has bolstered dollar demand despite bearish factors such as a drop in crude oil prices to a three-week low, which eased inflation concerns and could encourage future rate cuts. The euro weakened against the dollar amid lower European bond yields and weaker-than-expected consumer confidence data from the Eurozone. The September Richmond Fed manufacturing index also fell short of expectations, adding downward pressure on the greenback. Meanwhile, gold and silver prices declined due to a stronger dollar and hawkish central bank commentary. Markets are now pricing in a 51% chance of a +25 basis point rate hike at the next FOMC meeting (October 27-28), while the ECB is seen with a 46% probability for a similar move. The yen also saw slight gains due to falling oil prices and reduced U.S. Treasury yields.
Topics: dollar index (DXY) Federal Reserve FX markets inflation