Dollar Hits 2-Month High as Investors Boost Bets on Fed Rate Hikes

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Summary · why it matters

The dollar index jumped to its highest level in two months after investors increased their bets that the Fed will raise interest rates twice more this year. As of 10:54 p.m. Thailand time, the dollar index was up 0.20% at 101.303, after touching 101.310, its highest level since July 29. The dollar rose 0.07% to 1.137 against the euro and strengthened 0.39% to 158.90 yen. The latest FedWatch Tool from CME Group indicates that investors now assign a 66.4% probability to the Fed raising rates by 0.25% to 4.00-4.25% at its October meeting, up from 55.4% last week, and a 50.3% probability to another 0.25% hike to 4.25-4.50% in December, up from 41.7%. Meanwhile, the Dot Plot report shows that 16 of the Fed's 18 officials expect one more rate increase this year. Anna Paulson, president of the Federal Reserve Bank of Philadelphia, said the Fed may need to continue raising rates to bring inflation back to its 2% target, and Michael Barr, a member of the Fed's Board of Governors, said he expects the Fed will need to keep raising rates to control inflation. S&P Global reported that the preliminary composite purchasing managers' index for U.S. manufacturing and services rose to 58.4 in September, a 62-month high, from 56.0 in August.

Impact on assets 3

Carbon Removal (DAC)▲ · 1 stocks
CME Group Inc
CME
▲ PositiveDemandrelevance

Investors' increased Fed rate-hike bets drive higher trading volumes and FedWatch Tool usage, benefiting CME Group's derivatives business.

Others▲ · 2 stocks
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