Dollar Rises Globally Amid Inflation Fears, Holds Steady Above 3.17 Shekels
Translated & summarized from Calcalist by baba
The U.S. dollar rose globally to a 19-month high, while trading slightly above 3.17 shekels locally. Increased bets on Federal Reserve interest rate hikes are driven by high inflation data and hawkish central bank comments. Major firms like Goldman Sachs predict multiple rate increases into 2025. Attention is now on New York Fed President John Williams's upcoming speech for further policy signals.
The story in 5 lines · by baba
- Dollar index hits 19-month high amid global market fluctuations.
- U.S. dollar trades above 3.17 shekels locally.
- Traders anticipate more Federal Reserve rate hikes due to inflation.
- Goldman Sachs forecasts three consecutive Fed rate increases into 2025.
- New York Fed President John Williams's speech is highly anticipated.
The U.S. dollar saw a slight increase on global markets, maintaining a 19-month high. Locally, the dollar traded above 3.17 shekels, with minor fluctuations. The euro traded around 3.52 shekels. Globally, the dollar index, measuring its strength against major currencies, rose 0.1% to 103.0 points, its highest level since April 2025. The euro fell 0.1% against the dollar, trading below $1.11, and the pound dropped 0.2% to trade above $1.32.
Traders are increasing bets on further interest rate hikes by the U.S. Federal Reserve (Fed). This sentiment is fueled by higher-than-expected October inflation data released Tuesday and hawkish remarks from senior Fed officials. These officials expressed concern over persistent inflation, leaving the door open for a more aggressive half-percentage-point rate increase.
Several major investment firms now anticipate an additional rate hike in early next year, beyond the upcoming December 9th meeting. Goldman Sachs forecasts the Fed will raise rates again in its January 29th meeting and likely again on March 19th, predicting three consecutive rate increases. Analysts at Bank of America and JPMorgan are questioning the Fed's decision-making process, particularly the choice not to raise rates at the last meeting, suggesting the Fed may be reacting too slowly to inflation.
Market attention is focused on a speech by New York Fed President John Williams later today. Gavin Friend, a senior markets strategist at National Australia Bank, noted that Williams's comments will be closely watched, especially given his previous stance favoring a pause in rate hikes. Friend observed that Fed officials appear to be competing to signal support for rate increases following the October Consumer Price Index report. Analysts at Bank of America believe the Fed's October decision to hold rates steady was a policy error and that the risk of a January rate hike, rather than March, is increasing.
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