Forex News: U.S. Dollar Rises Amid Fed Rate Hike Signals

U.S. Dollar Rises Amid Fed Rate Hike Signals

(RTTNews) - The U.S. dollar strengthened against other major currencies in the Asian session on Monday, as the Federal Reserve (Fed) is making aggressive rate-hike bets for Wednesday's decision, following higher U.S. inflation figures.

Hotter-than-expected U.S. inflation also reinforced the case for higher rates. Markets are currently pricing in an 86% probability that the US Fed will raise its policy rate by 25 basis points on Wednesday, with another rate hike expected later this year.

Additionally, the remarks made by U.S. President Donald Trump indicating his growing hunger for higher interest rates, also led to the upturn of USD.

The U.S. President Trump over the weekend stated that he was unsure if Federal Reserve (Fed) policymakers would raise interest rates during their meeting this week.

However, according to Business Standard, he stated that the US "should be paying the lowest interest rate in the world" regardless of what the Federal Reserve's statistics on inflation and the economy shows.

Asian stock markets traded lower amid surging crude oil prices after the critical East-West pipeline was shut by Saudi Arabia following drone attacks and talks between Iran and the GCC about a possible reopening of the Strait of Hormuz were postponed. The pipeline provided an alternative route around the Strait of Hormuz.

In the Asian trading today, the U.S. dollar rose to a 1-month of 1.1551 against the euro and a 1-1/2-month high of 0.8190 against the Swiss franc, from last week's closing quotes of 1.1600 and 0.8164, respectively. If the greenback extends its uptrend, it is likely to find resistance around 1.14 against the euro and 0.80 against the franc.

Against the pound, the yen and the Canadian dollar, the greenback edged up to 1.3486, 154.30 and 1.3879 from Friday's closing 1.3520, 153.55 and 1.3872, respectively. The greenback may test resistance around 1.33 against the pound, 161.00 against the yen and 1.40 against the loonie.

Looking ahead, Canada CPI data for August is due to be released in the New York session.

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