The dollar strengthened against major currencies today after the release of strong US inflation data and surging oil prices prompted investors to raise their expectations for interest rate hikes by the US Federal Reserve. As of 00:29 Thailand time, the dollar index was up 0.15% at 98.970, while the dollar rose 0.09% to 1.162 against the euro and appreciated 0.46% to 154.24 yen. Most recently, the CME Group's FedWatch Tool indicated that investors priced in a 70.0% probability that the Fed will raise interest rates by 0.25% at its September 16 meeting, up from 61.2% yesterday, and a 30.0% probability that the Fed will hold rates at 3.50-3.75% at the September 16 meeting, down from 38.8% yesterday. The US Labor Department reported the producer price index for August, with headline PPI up 5.4% year-on-year, above analysts' forecast of 5.3% and following 4.8% in July. On a month-on-month basis, it rose 0.4%, in line with expectations, after a 0.1% increase in July. Core PPI rose 4.6% year-on-year, in line with expectations, following 4.3% in July, and rose 0.2% month-on-month, below the forecast of 0.3%, after 0.3% in July. Meanwhile, crude oil prices in global markets soared, with Brent crude surging past $105 per barrel and West Texas Intermediate crude breaching $100 per barrel amid tensions between the United States and Iran, which have investors worried about disruptions to oil supply from the Middle East. The Wall Street Journal reported that advisers to President Donald Trump warned that an Iran war could drag on for the remainder of Trump's term, and Dan Struyven, head of global commodities research at Goldman Sachs, said that escalating violence in the US-Iran conflict, now in its seventh month, is raising the risk that oil prices could spike above $120 per barrel as Iran intensifies attacks on ships in the Strait of Hormuz.
CME Group IncHigher rate-hike odds drive more futures/derivatives trading and FedWatch activity on CME's platform.
Goldman Sachs Group Inc