U.S. Dollar Advances Amid Rising Fed Rate Hike Expectations Following CPI Release

(RTTNews) - The U.S. Dollar value moved higher on Tuesday with heightening expectations of an interest rate hike by the U.S. Federal Reserve following the release of U.S. inflation data which came in exceeding analysts' forecasts. In addition, despite a pause in the U.S. attacks on Iran, the absence of a breakthrough in negotiations kept inflation concerns alive.

Today, the U.S. Dollar Index DXY, which measures the Greenback against a basket of other major currencies, was last seen trading at 102.24, up by 0.59 (or 0.58%).

While against the Euro, the USD was trading at 1.116, up by 0.53%, against the GBP, the USD was trading at 1.334, up by 0.71%.

Against the USD, the Japanese Yen was trading at 158.761, down by 0.55%, the Swiss Franc was trading at 0.825, down by 0.70%; and the Canadian Dollar was trading at 1.419, down by 0.49%.

Against one unit of Australian Dollar, the USD was trading at 0.687, up by 0.86%.

Today in the U.S., data from the U.S. Automatic Data Processing revealed that private employers in the U.S. added an average of 19,750 jobs per week in the four weeks ending October 24, up from an average weekly gain of 16,750 in the previous four-week period.

Data provided by the U.S. National Federation of Independent Business revealed that the Small Business Optimism Index edged down to 97.80 in October from 97.90 in September, a new low since June and compared to forecasts of 97.70.

Data from the U.S. Bureau of Labor Statistics, on a month-on-month basis, in October, the Consumer Price Index increased 0.40%, compared to a 0.60% increase in September, and above analysts' predictions of 0.30%, showing a moderation in consumer inflation.

On a month-on-month basis, the core consumer prices (which exclude food and energy goods), increased by 0.30% for the third consecutive month in October, above market expectations of 0.20%.

Of note, October's report does not contain the annual inflation figures since the BLS could not publish full October data in 2025 due to the government shutdown. Hence, no numbers are currently available for comparison.

The U.S. Federal Reserve meets on December 8-9 to decide and announce interest rates. Investors have increased their bets on an interest rate hike.

With inflation running high above the central bank's target of 2.00% range, the odds on a 25-basis-point rate hike (from 4.00% to 4.25%) have increased to 88.50% while the bets on a 50-basis-point stand at 11.50%, according to the CME Group's FedWatch Tool.

The bets on the Fed holding the rates without any change now stand at nil.

On Sunday, U.S. President Donald Trump stated that if the ongoing efforts for peace talks show a significant progress, any need for new attacks on Iran would be highly unlikely.

Today, emphasizing that there is a positive momentum to end the conflict, through Truth Social, Trump remarked that Qatar, Saudi Arabia, the U.A.E., Bahrain, Kuwait, and other Arab nations have agreed that Iran cannot have a nuclear weapon but for now, they wanted the U.S. to maintain status quo. Trump has conceded to their request.

With fading supply disruption concerns, crude oil prices slumped for the second day.

Contradicting Trump's optimistic views, the Secretary of Iran's Supreme National Security Council Major General Mohsen Rezaei struck a different tone.

Warning against "deceptive statements" by U.S. officials, Rezaei denied any meetings between U.S.-Iran officials.

Sounding tough, Rezaei observed that after presenting its seven conditions to the U.S., Iran is still waiting for its response.

Further, Rezaei also added that all U.S. claims about ongoing negotiations with Iran and a meeting in Qatar are lies spread with an intention to bring down the oil prices and ease the economic pressure in the U.S.