The euro gained 0.6% to US $ 1.15945, rebounding from the US $ 1.1522 touched in the previous session, its lowest in almost 15 months.
The Consumer Price Index rose 0.4% last month, above the 0.3% rise expected by economists polled by Reuters. In annual terms, the CPI increased by 5.4%, surpassing the 5.3% advance registered in August.
Shorter-term Treasury yields, which typically move in tandem with interest rate expectations, rose after the report, while longer-term yields fell, indicating that eThe market has yet to internalize a sustained period of inflation.
The gap between the two-year and ten-year Treasury notes closed at its lowest level in two weeks after being extended to a maximum of three and a half months on Friday.
“The market is now seeing a major turnaround in how inflation is showing more signs of being persistent than transitory, and that will likely force the Fed to drive a rate hike much earlier than people were anticipating,” Edward said. Moya, a senior analyst at Oanda.
The market had been estimating a rate hike for December 2022, but is now targeting September of that yearadded.
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