Dollar rises to 19-month high

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The dollar rallied to a 19-month high against its major peers on Thursday as traders bet on further Federal Reserve rate hikes, while the yen wobbled after comments from a dovish…

The dollar rallied to a 19-month high against its major peers on Thursday as traders bet on further Federal Reserve rate hikes, while the yen wobbled after comments from a dovish central banker and Japan’s top currency diplomat warning of volatility.

Traders ramped up bets on further Fed tightening after stronger-than-expected October inflation data and a series of hawkish remarks from US central bank officials, who expressed concern over stubborn inflation and left open the possibility of a 50-basis-point increase.

Some brokerages, including Goldman Sachs, now expect another hike early next year, in addition to one in December. The dollar index , which measures the greenback against a basket of currencies, rose 0.11 percent to 102.98, the highest since April 2025.

The euro was down 0.08 percent against the US dollar at $1.108, the lowest since May last year, while the sterling weakened 0.16 percent to $1.3259.

New York Fed President John Williams is due to appear on a panel late Thursday that will be closely watched given his pre-October FOMC meeting views the Fed had time on rate hikes, said Gavin Friend, senior markets strategist at National Australia Bank, in a note.

Fast forward two weeks and following a hotter-than-forecast October CPI report, Fed officials appear to be falling over themselves to talk up rate hikes, Friend said.

Any guidance from Williams will be seized on. Against the Japanese yen, the dollar eased 0.03 percent to 159.74 after swinging between gains and losses.

The dollar hit a more than two-month high against the yen earlier on Thursday, as traders focused on wide interest-rate differentials amid growing bets on further Fed hikes.

Bank of Japan board member Toichiro Asada, one of two policymakers who dissented from raising interest rates in June and September, pushed back against calls within the board for a near-term interest rate hike, saying in a speech that premature rate hikes could hurt growth and push down underlying inflation.

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