Dollar eases from 18-month high as Treasury yields fall; Fed hike bets ease

On October 15, the US dollar experienced a decline from its 18-month high as Treasury yields dropped, and cautious statements from Federal Reserve officials reduced expectations of a rate hike in October. The dollar index fell 0.2% to 102.03, after reaching an 18-month high on Wednesday due to stronger-than-expected US inflation data.

The euro strengthened 0.5% to $1.1216, nearing its biggest daily gain in nearly two months, while the British pound also rose 0.5% to $1.3253, remaining steady after showing an unexpected 0.1% economic growth in August. Market sentiment became cautious as the unexpectedly strong US CPI reading initially boosted expectations of higher-for-longer Fed rates, and concerns about AI companies' debt burdens resurfaced, increasing safe-haven demand for Treasuries.