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US Dollar
Source: Newsmaker.id
The US dollar strengthened sharply after US inflation data revealed broader-than-expected price pressures. The US Dollar Index (DXY) rose 0.68% to 102.86, marking its highest level since April 2025. This gain reversed the previous session's decline and reinforced expectations that the Federal Reserve still has room to raise interest rates.
CPI data showed a robust increase in US consumer prices in September, driven primarily by a surge in gasoline prices. However, market attention also focused on higher-than-expected core inflation. This situation raised concerns that energy-driven inflationary pressures are beginning to spill over into other sectors of the economy.
Shifts in interest rate expectations emerged following the data release. Markets now price in a 56% probability that the Fed will hold rates steady at the October 27–28 meeting, while also factoring in approximately 79 basis points of tightening through the end of 2027. Previously, dovish comments from several Fed officials had dampened expectations for rate hikes.
In Europe, the euro came under renewed pressure. The EUR/USD pair fell 0.69% to US$1.1121, hitting a 17-month low against the dollar. Rising oil prices and concerns regarding France's fiscal situation acted as additional headwinds for the single currency. Meanwhile, sterling dropped 0.58% to US$1.3178.
The Japanese yen also weakened by 0.33% to 158.81 per dollar, indicating persistent pressure on the currency. Markets will now closely monitor statements from Fed officials, the release of the Beige Book, and further monetary policy developments to see if September's inflationary pressures will drive further adjustments to US interest rate expectations.
Source: Newsmaker.id