Weekly Roundup: US dollar rallies as strong data boosts Fed bets
Amy Richards September 18th 2023 - < 1 minute read
A shifting market mood saw the US dollar waver through the first part of the week. After slipping amid an upbeat mood on Monday, the safe-haven ‘greenback’ regained ground as sentiment soured the following day.
Mixed inflation figures then rocked USD on Wednesday. An uptick in headline inflation initially boosted the currency before a drop in the core CPI reading dragged USD back down.
The ‘greenback’ managed to rally the following day, thanks to strong US economic data. Producer prices and retail sales both beat forecasts, boosting bets on further action from the Federal Reserve.
Despite an improvement in risk appetite, the US dollar held on to its gains at the end of the week. A rise in US Treasury yields underpinned the American currency.
So far this week, USD has traded in a wide range after a brief spike in Treasury yields sparked volatility.
The focus looking forward is the Fed’s interest rate decision on Wednesday evening. If the bank signals that it has more work to do to keep bringing inflation down, the US dollar could climb.