A 75 basis point rise would be the biggest since 1994 and, amid the heavy losses global stock markets are currently suffering, the safe-haven appeal of the dollar is also improving.
“There are no convincing signs of bargain-hunting in riskier currencies or profit-taking on long dollar positions after yesterday’s fireworks…In this scenario, shorting the dollar is not a good idea.” said Kenneth Broux of Société Générale.
Friday’s strong inflation reading fueled the worst day for two-year US Treasuries since 2009. Added to Friday’s post-CPI jump, yields rose around 54 basis points, the biggest two-day move since just after of Lehman’s collapse in 2008, Deutsche Bank said.
The US currency hit one-month highs against the euro, Australian dollar, New Zealand dollar, Swiss franc and Canadian dollar. It hit a fresh one-month high of $1.0397 per euro in the session, before pulling back slightly to $1.0475.
The yen was trading at 134.40 per dollar, after hitting a 24-year low of 135.22 the day before. It had earlier fallen to as low as 133.88 yen.
By Saikat Chatterjee of Reuters Agency
Source: Ambito
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