TOKYO: The US dollar strengthened to a 19-month high against major currencies on Thursday as investors increased expectations of further Federal Reserve interest rate hikes following stronger-than-expected inflation data and hawkish comments from central bank officials.
The dollar index, which measures the greenback against a basket of major currencies, climbed 0.11 per cent to 102.98, its highest level since April 2025. The euro slipped 0.08 per cent to $1.108, while the British pound declined 0.16 per cent to $1.3259.
Market expectations for tighter US monetary policy increased after October inflation figures exceeded forecasts. Several Federal Reserve officials expressed concern about persistent inflation, leaving the possibility of a 50-basis-point rate increase open. Some financial institutions, including Goldman Sachs, now anticipate another rate hike early next year, in addition to an expected increase in December.
Attention is also focused on New York Federal Reserve President John Williams, whose comments later on Thursday are expected to provide further clues about the central bank's policy direction.
Meanwhile, the Japanese yen remained volatile against the dollar, with the exchange rate hovering around 159.74. Comments from Bank of Japan board member Toichiro Asada opposing premature rate increases weighed on the currency. However, warnings from Japan's top currency diplomat Atsushi Mimura about possible market intervention provided temporary support.
Analysts said the 160 yen-per-dollar level remains a key threshold, with further dollar strength dependent on expectations of US rate hikes and the Bank of Japan's policy decisions.
Elsewhere, the Australian dollar fell 0.15 per cent to $0.6836, while the New Zealand dollar declined 0.18 per cent to $0.5552. -Reuters
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