Dollar clocks largest intra-session gain since '20 after unprecedented rise in US CPI



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Dollar clocks largest intra-session gain since '20 after unprecedented rise in US CPI

The US Dollar Index (DXY) measured against a basket of six major currencies on an average had shelved its largest intra-session gain since 2020 on Tuesday as a stronger-than-anticipated US inflation data had bolstered bets that the US Fed would highly likely to stay hawkish in a near- to intermediate-term outlook.

However, as of Wedneday morning US trading hour, US Dollar Index (DXY) edged lower and was last trading at 109.13. In the matter of the fact, in the day’s large-scale gains in US Dollar against a number of major peers across the globe came forth as US Labour Department data had unveiled earlier in the day that US inflation rose unexpectedly last month, eventually stepping up bets that the US Federal Reserve would raise its benchmark borrowing cost by 75 bps (basis percentage points) on Wednesday, which in effect had bolstered the greenback.

On top of that, while US CPI rose by 0.1 per cent last month and US Core CPI gained 6.3 per cent on a year-on-year basis, mostly galvanized by a apollonian rise in costs of rents and medicines, risks are looming large of a further inflation-surge over the upcoming winter, as last month’s gain in US CPI was largely moderated by a 10.6 per cent drop in US gasoline prices.

Dollar gains after sombre inflation data

Citing statistics, in the day’s FX market wind-down, US Dollar Index (DXY) measured against a basket of six major currencies on an average rose 1.5 per cent to 109.85, marking off its largest intra-day percentage gain since the March of 2020.

Euro faltered as much as 1.5 per cent to $0.9973, while greenback rallied 1.2 per cent against the Japanese Yen to 144.51 yen per Dollar. Sterling fell sharply as well, as British pound rounded of the session 1.6 per cent lower to $1.1499 against its American peer.

The safe-haven Swiss Franc lost 0.83 per cent to $0.9616 against the greenback, while risk-sensitive Aussies shed 2.26 per cent to $0.6733 and commodity-linked Canadian Dollar dropped 1.41 per cent to $1.3167.