The dollar weakened against major currencies, in line with the decline in US government bond yields, after the release of the August consumer price index. At 9:49 pm Thailand time, the dollar index was down 0.03% at 99.017, while the dollar weakened 0.01% to 1.161 against the euro and fell 0.53% to 153.56 yen. The US Labor Department reported that headline CPI, which includes food and energy, rose 3.4% year on year, in line with analysts' expectations, after also rising 3.4% in July, and rose 0.4% month on month, in line with expectations, after rising 0.1% in July. Core CPI, which excludes food and energy, rose 2.4% year on year, in line with expectations, after rising 2.5% in July, but rose 0.3% month on month, above analysts' expectations of 0.2%, after rising 0.2% in July. However, investors increased their bets that the Federal Reserve will raise interest rates at next week's meeting, with the CME Group's FedWatch Tool indicating that investors assign an 85.8% probability to the Fed raising rates by 0.25% at its September 16 meeting, up from 72.4% yesterday, and a 14.2% probability to the Fed holding rates at 3.50-3.75% at the September 16 meeting, down from 27.6% yesterday.
CME Group IncInvestors increased bets on a Fed rate hike, boosting trading activity on CME's FedWatch-derived futures; CME is mentioned as the source of the FedWatch Tool.
US 10Y yields fell after the in-line CPI print, with the dollar weakening in line with the decline in government bond yields.
