The dollar jumped against the yen, the euro and other currencies today after the release of data that showed a larger-than-expected rise in inflation in the United States, which means that the Federal Reserve (the US central bank) may announce a significant increase in interest rates.
The dollar index, which measures the value of the US currency against a basket of six currencies, including the euro, rose 1.1 percent to 109.39, approaching a 20-year high of 110.79, which was recorded last week. The index turned upward after the release of inflation data.
According to a report by the US Department of Labor, consumer prices rose suddenly in August, and core inflation rose amid rising rent and health care costs.
The euro, sterling and yen all fell. The euro fell by 1 percent against the dollar to 1.0016 dollars, after approaching the highest level in a month in the previous session at 1.0198 dollars.
Against the yen, the dollar rose 0.9 percent to 144.095 yen. The Japanese currency earlier received support from statements by officials who indicated that the government may take steps to counter the yen’s excessive weakness.
The euro has made gains in recent sessions. Five well-informed sources said last week that the key interest rate in Europe could rise to 2 percent and possibly more to curb inflation.
And the pound fell against the dollar 1.2 per cent to 1.1544 dollars. The sterling rose earlier today to a two-week high against the US currency after Britain’s unemployment rate fell to its lowest level since 1974, while wages excluding bonuses rose 5.2 percent, the highest rate since the three months to August 2021.
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