The US dollar weakened against most major currencies on Thursday (October 29) following data that showed an increase in US inflation for September. The dollar index (DXY) fell 0.08% to 102.02, while the euro strengthened slightly after the European Central Bank (ECB) kept interest rates unchanged. Dollar movements remained limited, as much of the latest economic data had already been anticipated by the market.
US data indicated that inflation rose, driven by higher gasoline prices and the cost of various goods—reinforcing expectations that the Federal Reserve still has grounds to raise interest rates in December. Meanwhile, the US economy grew faster than expected in the third quarter, bolstered by resilient household consumption and business investment in AI-related sectors.
However, remarks from Fed Chair Kevin Warsh signaled a more measured approach, tempering expectations for aggressive tightening. Warsh suggested that inflation could be brought back toward the 2% target without significantly slowing economic growth. The market currently estimates an 80% probability of an interest rate hike in December.
Other currencies also reacted to global policy dynamics. The EUR/USD pair hovered around US$1.1163, while the EUR/GBP pair fell 0.23% to 0.834 following the ECB’s decision to hold rates steady. In Switzerland, the USD/CHF pair dropped 0.13% to 0.827, indicating that the Swiss franc remains supported even as the US dollar holds at a relatively strong level.
In Asia, the USD/JPY pair traded around 157.87, with the yen remaining under pressure ahead of the Bank of Japan’s upcoming policy decision. Meanwhile, the NZD/USD pair hovered around US$0.5625, having previously faced downward pressure following the Reserve Bank of New Zealand’s decision to maintain interest rates at 2.75%.