Dollar Gains on Hawkish Comments from Fed Officials
The U.S. dollar index (DX-Y.NYB) rose to a seven-week high as comments from Federal Reserve officials suggested continued inflationary pressures may require further monetary tightening. Boston Fed President Susan Collins and Richmond Fed President Tom Barkin both indicated that inflation could remain elevated, increasing the likelihood of additional rate hikes at the upcoming FOMC meeting on October 27-28. Markets are now pricing in a 55% chance for such an increase. The euro weakened against the dollar as European government bond yields fell and consumer confidence dropped more than expected to -16.5, below forecasts of -16.0. The EUR/USD pair hit a seven-week low amid concerns over inflation persisting in the Eurozone due to rising energy prices. Meanwhile, crude oil prices declined by 1% on Tuesday, easing some inflation fears and limiting dollar gains. The yen fluctuated slightly as Japan's markets were closed for a national holiday, affecting trading activity. Precious metals ended mixed with gold falling while silver rose modestly.
Topics: dollar index (DXY) Federal Reserve FX markets inflation