The US dollar is once again riding the wave of expectations that the Federal Reserve will proceed with another significant increase in interest rates. Investors are counting on the fact that the US authorities will announce inflation for September this week, which will still be very high.
Inflation could fall in the US
The US dollar strengthened for the fourth day in a row during Monday’s trading. During this week, the local authorities will announce fresh data on the development of inflation, this time for September. It is expected that, although it may fall slightly, it will still remain close to the eight percent level. Based on this, investors expect that the Federal Reserve System will in no way back down from its announced plan to further sharply increase interest rates.
The euro weakened against the dollar
The dollar index gained 0.3 percent on Monday and is approaching a 20-year high. The euro lost 0.4 percent against the dollar, and the British pound weakened to the same extent. “The dollar is holding high ahead of the release of recent inflation data, which is likely to support the Fed’s stance of raising interest rates and keeping them high for a longer period of time,” Joe Manimbo, chief analyst at Washington-based Convera, told Reuters.
