Dollar Rises Against Major Counterparts

(RTTNews) - The U.S. dollar climbed higher on Wednesday, as bond yields soared to their highest level since 2008, amid rising concerns about a recession after data showed a sharp acceleration in UK inflation.

Amid rising expectations that Federal Reserve will continue to aggressive raise interest rates to fight inflation, the dollar firmed against other major currencies.

Traders noted comments from Minneapolis Federal Reserve President Neel Kashkari who said the job market demand remained strong and underlying inflation pressures have not peaked yet.

On Tuesday, Kashkari said that the Fed may need to push its benchmark policy rate above 4.75% if underlying inflation does not stop rising.

According to the Federal Reserve's Beige Book, economic activity in the U.S. expanded modestly since early September, although the report noted conditions varied across industries and districts.

The Fed described retail spending as relatively flat due to lower discretionary spending, while manufacturing activity held steady or expanded in most districts in part due to easing in supply chain disruptions.

Rising mortgage rates and elevated house prices further weakened single-family starts and sales, the Beige Book said, with bankers in most districts reporting declines in loan volumes partly due to shrinking residential real estate lending.

However, the Fed noted the weakness in the housing market helped buoy apartment leasing and rents, which generally remained high.

With regard to inflation, the Beige Book noted price growth remained elevated but acknowledged some easing across several districts.

In data from Europe, inflation in the U.K. in September increased to 10.1%, from 9.9% in August. Core inflation excluding the more volatile food and energy prices increased to 6.5%, from 6.3% in August.

The final reading of inflation in The Euro Area in September stood at 9.9%, versus 9.1% in August.

The dollar index surged to 113.10 this afternoon, and was last seen at 112.90, up nearly 0.7% from the previous close.

Against the Euro, the dollar firmed to 0.9776 from 0.9860.

The dollar strengthened to 1.1223 against Pound Sterling, gaining from 1.1322.

Against the Japanese currency, the dollar firmed to 149.89 yen from 149.23 yen.

The Aussie weakened against the U.S. dollar. The AUD/USD pair is trading at 0.6269, after closing at 0.6311 on Tuesday.

The dollar is stronger against Swiss franc, fetching CHF 1.0045 a unit as against CHF 0.9442 on Tuesday.

Against the Loonie, the dollar is up nearly 0.25% at C$1.3765.