Dollar near eight-day high as US data lifts Fed hike bets

On Thursday, the U.S. dollar reached a high not seen in eight days after favorable U.S. economic data increased the probability of a Federal Reserve rate increase. This data came ahead of the Jackson Hole central bankers' symposium. Markets are also watching Bank of Japan deputy governor Ryozo Himino's upcoming speech for insights on potential September rate hikes and the broader tightening strategy.

The U.S. Commerce Department reported that the Personal Consumption Expenditures Price Index rose 3.7% over the past year, matching the previous month's rise and slightly above economists' expectations. The dollar index, a measure of the greenback against a basket of currencies, climbed 0.21% to 99.13, its highest level since August 19.

However, the dollar traded at 159.23 against the yen, still significantly above its multi-decade low of around 164. Himino's speech, scheduled for 0130 GMT, is expected to provide clarity on the possibility of a September rate hike. If Himino echoes similar language from his previous comments, it could signal a high likelihood of a rate hike at the September meeting.

Still, analysts note that significant yen buying may remain limited due to speeches by Himino and Fed Chair Kevin Warsh. The Canadian dollar remained stable against the dollar at C$1.388, while the euro and British pound held steady at $1.1655 and $1.3592, respectively. The Australian dollar and New Zealand's kiwi also saw slight gains against the dollar.

In the cryptocurrency market, Bitcoin rose 0.55% to $78,874.60, while Ether increased 1.07% to $2,498.35.