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US Dollar
Source: Newsmaker.id
The US dollar strengthened by up to 0.5% to reach the 102.72 level during Wednesday's trading (Oct 14), marking its highest position since April 2025. This rally followed US inflation data revealing persistent price pressures, which heightened market expectations regarding potential policy tightening by the Federal Reserve.
The US CPI rose 0.6% month-on-month in September—the fastest pace in five months—while annual inflation hit 3.7%. Although the headline figures largely aligned with forecasts, core inflation pressures exceeded expectations; Core CPI rose 0.3% month-on-month and 2.6% year-on-year.
The rise in Core CPI drew attention as it signaled that underlying price pressures remain entrenched. This trend was further reinforced by rising energy prices—particularly oil—which climbed again due to escalating tensions in the Middle East and concerns over supply disruptions.
These inflation results could influence market expectations regarding the Federal Reserve's next move. Persistent price pressures might prompt the Fed to maintain a tight monetary policy for longer. However, Fed Vice Chair for Supervision Michelle Bowman stated she saw no immediate need for another rate hike following the increase implemented the previous month.
Diverging views have kept investors closely monitoring communications from Fed officials and upcoming economic data. The market will assess whether the September inflation spike is significant enough to shift interest rate expectations or if it merely reflects temporary pressure from rising energy costs.
Newsmaker Analysis: The dollar's rise to 102.72 indicates a market reaction to Core CPI figures that came in hotter than anticipated. Fundamentally, this exerts pressure on gold and risk assets by raising the likelihood that interest rates will remain elevated for an extended period. Nevertheless, Bowman's remarks suggest that rising inflation does not automatically guarantee an immediate rate hike by the Fed. Therefore, the dollar's future direction will depend heavily on upcoming inflation data and how Federal Reserve officials interpret current price pressures.
Source: Newsmaker.id