Having topped 107.72, its top level since mid-July, the Dollar Index (DXY) moved higher to 107.567 by a total of 0.1%.
The gauge is expected to increase by about 2% on a weekly basis, resulting in its highest weekly result from two months ago.
Many Fed executives, such as James Bullard and Mary Daly, the respective presidents of the Fed in St. Louis and San Francisco, spoke out in favor of additional rate increases, which helped set the sentiment just right.
This indicates that a third consecutive 75 bps increase in interest rates is probable in the upcoming month. Esther George, the president of the Federal Reserve in Kansas City, has stated that her organization would continue to tighten policy once they are absolutely certain that there is a significant decline in inflation.
The EUR/USD exchange rate dropped to 1.0083, its lowest level since the 15th of last month. This came after German producer prices rose 5.3% last month, making it the biggest increase in over 70 years. There was a 37.2% YoY price increase.
Although the revived fears over inflation will put additional pressure on the ECB to raise interest rates again in the upcoming month, this is not good for the euro because traders appear to be increasingly worried about the possibility of an economic downturn.
Notwithstanding UK retail sales surprisingly increasing last month, making a 0.3% growth, British consumers spent more than anticipated last month as online offers tempted many, and the GBP/USD slipped to 1.1913.
Given that inflation has risen beyond 10% and the BoE’s forecast that the nation’s economy will certainly face recession in Q4 and may endure for more than one year, this may be the last big triumph for UK businesses for a while.