Dollar Rises As Traders Bet On Aggressive Rate Hikes

(RTTNews) - The U.S. dollar firmed against its major rivals on Friday, amid bets the Federal Reserve will continue with its aggressive policy tightening moves in the coming months.

The latest data on U.S. inflation has raised expectations that the central bank will announce another 75-basis point hike in interest rates at its November meeting.

In U.S. economic releases today, a report from the University of Michigan showed a rebound in inflation expectations in the month of October. One-year inflation expectations climbed to 5.1% in October after dropping to a one-year low of 4.7% in September, while five-year inflation expectations increased to 2.9% in October after falling to 2.7% in September.

The data has led to renewed inflation concerns after optimism inflation has peaked contributed to a substantial turnaround on Wall Street on Thursday.

The University of Michigan also said its consumer sentiment index crept up to 59.8 in October from 58.6 in September. Economists had expected the index to inch up to 59.0.

Data from the Commerce Department showed U.S. retail sales came in unchanged in the month of September after rising by an upwardly revised 0.4% in August.

Another report from the Commerce Department showed business inventories in the U.S. climbed by 0.8% in August after rising by a revised 0.5% in July.

A report from the Labor Department showed import prices in the U.S. plunged by 1.2% in September after tumbling by a revised 1.1% in August. Economists had expected import prices to dive by 1.1% compared to the 1% slump originally reported for the previous month.

The dollar index rallied to 113.42 this afternoon, gaining nearly 1%.

Against the Euro, the dollar strengthened to 0.9730, gaining more than 0.5%.

The dollar is trading at 1.1175 against Pound Sterling, firming from 1.1331 a unit.

Against the Japanese currency, the dollar is stronger by nearly 1% at 148.64 yen.

The dollar is firm at 0.6204 against the Aussie, gaining from 0.6299.

Against Swiss franc, the dollar is stronger, fetching CHF 1.0048.

The Canadian currency is weak as well against the dollar as oil prices tumbled on demand worries. The dollar is fetching C$1.3883 a unit, compared with C$ 1.3758 on Thursday.