US Dollar Strengthens as Inflation Data Raises Fed Rate Hike Expectations

The US dollar extended its gains against major global currencies after stronger-than-expected inflation figures and comments from Federal Reserve officials increased expectations of an interest rate hike next month. The dollar index, which tracks the American currency against six major currencies, climbed 0.2% to 102.4 points, approaching its highest level in nearly two weeks. It had already gained 0.5% in the previous trading session following the release of October's US consumer price data. Rising food and housing costs contributed to the higher-than-expected inflation reading.

Euro, Pound and Yen Face Pressure

Several major currencies weakened as the dollar continued to strengthen. The euro slipped to $1.114 after recording a decline of more than 0.5% in the previous session. Meanwhile, the British pound fell 0.2% to $1.332, approaching a two-week low. The Swiss franc also dropped 0.4%, while the Japanese yen declined 0.1% and briefly reached its weakest level in seven weeks. The yen is also approaching the closely watched level of 160 against the US dollar.

Australian Dollar Moves Against the Trend

The Australian dollar was the only currency among the G10 group to record gains against the US dollar during the latest trading session. It advanced approximately 0.1%, moving further away from its lowest level in seven months. Meanwhile, economic data from Germany showed that annual inflation slowed to 2.8% in October, confirming the earlier preliminary estimate. Investors are closely following economic indicators and central bank statements to understand how monetary policy could influence international currency movements.

Bitcoin Trades Near a Two-Month Low

The cryptocurrency market also experienced a slight decline, with Bitcoin falling 0.1% to $73,672.80. The digital currency continued trading close to its lowest level in approximately two months. Market participants are monitoring developments in global interest rates, inflation and investor sentiment as these factors influence demand for currencies and risk-sensitive assets. The dollar's latest performance highlights how expectations surrounding Federal Reserve decisions can affect financial markets worldwide.