The U.S. dollar index gained 0.2% to 99.03 as of 14:38 ET, buoyed by August producer price data that showed headline PPI up 0.4% month‑on‑month and 5.4% year‑on‑year, slightly above consensus. Core PPI rose 0.2% month‑on‑month and 4.6% year‑on‑year, matching forecasts. The stronger inflation reading lifted the market’s estimate of a Federal Reserve rate hike on 16 September to 74% from roughly 64%.
U.S. Treasury yields also climbed, with the 10‑year benchmark up 11.8 basis points to 4.955% and the two‑year yield rising 12.9 basis points to 4.556%. Meanwhile, West Texas Intermediate crude breached the $100 a barrel mark for the first time since 21 May, adding to the risk‑off backdrop.
In currency markets, the euro slipped 0.1% to $1.1614, while the yen rose 0.6% to ¥154.34 per dollar, hovering near a seven‑month peak. Japan’s foreign securities holdings fell by a record $87.8 billion in August, and the country’s revised second‑quarter GDP growth was reported at 1.4%. Traders are unwinding short‑yen carry trades ahead of a projected Bank of Japan rate hike on 18 September.
The European Central Bank, which maintains a 2% inflation target, signaled a 25‑basis‑point rate increase, citing rising energy prices linked to heightened tensions in the Middle East. Analysts noted that inflation risks remain elevated and could influence further policy moves later in the year.
