Forex – Dollar Soars To 3-Week Highs on Signs of 'Inflationary Pressures'

Forex – Dollar Soars To 3-Week Highs on Signs of 'Inflationary Pressures'

© Reuters.  © Reuters.

Investing.com – The dollar rose to three-week highs against a basket of major currencies after upbeat wholesale inflation data suggested that weakness in inflation could be waning ahead of the Federal Reserve interest rate decision.

The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.26% to 94.18.

The Labor Department said on Wednesday its for final demand increased 0.4% last month. In the 12 months through August, the PPI rose 3.1% after rising 2.8% in October. That beat economists’ forecast of a 2.9% for November.

The upbeat wholesale inflation report raised expectations for a solid due Wednesday. Bank of Tokyo Mitsu said the PPI data showed a sharp improvement in producer inflation, and added that the demand-led price push from higher commodity prices was a “classic” signal of increasing inflationary pressures.

Investor focus, meanwhile, is expected to shift to monetary policy as the Federal Open Market Committee (FOMC) got its two-day meeting underway on Tuesday, ahead of the Wednesday’s interest rate decision.

According to investing.com’s , 100% of traders expect the Federal Reserve to raise rates on Wednesday for the third time this year.

Elsewhere, sterling struggled to hold gains against the greenback, falling 0.17% to $1.3317 despite .

fell 0.34% to $1.1728, while fell 0.12% to £0.8810.

fell 0.02% to Y113.52, while rose 0.02% to 0.9919.

rose 0.19% to $1.2881 as the pair was supported by a slump in oil prices.

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