Dollar edges higher against Swiss franc after US inflation data

On September 11, the dollar experienced a slight increase in value against the euro and Swiss franc following U.S. inflation data. U.S. Consumer Price Index rose by 0.4% in August, up from 0.1% in July, while Core CPI increased by 2.4% year-on-year, up from 2.5% in July. Despite this, investor sentiment remained cautious as the Iran war escalated, driving up oil prices and limiting the U.S. dollar's progress.

The euro experienced a minor decline, dropping 0.13% to $1.15950, and the dollar strengthened 0.47% to 0.817 against the franc, marking its third consecutive weekly gain. Analysts noted that core CPI, which appeared to be accelerating, typically bolstered the likelihood of the Federal Reserve raising interest rates during their next meeting.

Markets now projected an 86% chance of a 25 basis-point increase, up from 72% the previous day. U.S. Treasury yields remained near multi-year highs, with the 2-year yield climbing 7.75 basis points to 4.63%. Although oil prices dropped, they remained above $100 per barrel, and diesel prices hit record highs, indicating sustained inflation.

The dollar index, representing the greenback's value against other currencies, remained steady at 99.12, signaling a second weekly decline. Meanwhile, the yen showed a potential second week of gains against the U.S. dollar, with the Bank of Japan expected to raise rates, enhancing the odds of further tightening if rising inflation pressures threaten inflation targets.