Dollar at 19-month high in global market as inflation data fuels rate-rise expectations
The possibility of further interest rate rises has grown as inflation in the United States has not come under control. As a result, the US dollar has strengthened in the global market, reaching its highest level in 19 months against the world's major currencies at the start of trading on Thursday.
According to a Reuters report, demand for the dollar rose because of higher-than-expected inflation data and a tough stance from officials of the US central bank, the Federal Reserve.
On Thursday (12 November), the dollar index in the international currency market rose at the start of the day to 102.88 points, its highest level since April 2025. It later stayed almost unchanged at 102.80 points.
The index measures the strength of the dollar against six major world currencies.
After October inflation data in the United States came in higher than expected, the likelihood of the Fed raising interest rates strengthened. Central bank officials have expressed concern about the persistence of inflation.
At the same time, central bank officials have not ruled out the possibility of a 50 basis point rate increase.
Market analysts believe rates could be raised in December and again at the start of next year. Goldman Sachs and several other brokerages have also forecast a rate increase at the start of next year.
The dollar's strength has affected other major currencies. The euro fell at one stage in Asian trading to 1.106675 dollars, its lowest since May 2025, before recovering somewhat to 1.1085 dollars.
Against the Japanese yen, the dollar at one stage reached 159.945 yen, its highest in more than two months, before easing to 159.62 yen.
Japan's monetary authorities have warned about intervening in the market to stop the yen's fall.
The report said the prospect of US rate rises and the differing policy positions of other major economies' central banks are strengthening the dollar's dominance in the international currency market.
