Investing.com – The U.S. dollar rose to a one-month high in European markets on Friday (August 19), after Federal Reserve policymakers pointed to further aggressive interest rate hikes in the future to curb inflation.
As of 17:11 Beijing time (05:11 a.m. ET), U.S. dollar index futures, which measure the U.S. dollar against six trade-weighted major currencies, rose 0.15% to 107.573; the U.S. dollar index rose 0.15% to 107.65, after hitting 107.72 earlier. The highest since July 18. U.S. Treasury benchmark yield The yield on the U.S. 10-year Treasury note.
The U.S. dollar index is up nearly 2 percent so far this week, on track for its best weekly performance since June 12.
Hawkish comments from Fed officials boosted the dollar after St. Louis Fed President James Bullard and San Francisco Fed President Mary Daly mentioned the need for further rate hikes.
Their comments point to a third straight 75 basis point rate hike in September, and Kansas City Fed President Esther George said they won't stop tightening until they are "completely confident" that inflation is coming back down.
Elsewhere, EUR/USD dipped 0.03% to 1.0085 after falling to 1.0070, its lowest since July 15. Earlier, German producer prices rose by 5.3% month-on-month in July, the largest increase in the Federal Republic of Germany since statistics began in 1949. At the same time, the annual rate of increase reached a staggering 37.2%.
While accelerating inflation could increase pressure on the European Central Bank to raise interest rates again in September, the accelerated rise in the PPI failed to boost the euro as investors became more concerned about the risk of a recession.
GBP/USD dipped 0.34% to 1.1889, even though UK retail sales unexpectedly rose in July by 0.3%. Last month, British shoppers spent more than expected thanks to online promotions.
However, UK retailers still face a bleak consumer outlook. With inflation rising above 10% in the UK, the Bank of England has warned that the country's economy could slip into a recession in the fourth quarter that could last more than a year.
USD/JPY rose 0.40% to 136.43, rising U.S. bond yields pushed USD/JPY to the highest level since July 28, and is expected to rise more than 2% for the week, the best weekly since June 10 Performance.
Risk-sensitive AUD/USD dipped 0.09% to 0.6912, while USD/CNY added 0.29% to 6.8055, hitting a two-year low against the greenback amid lackluster economic data and concerns over the outlook for the housing market.
Dollar/lira was up 0.17% at 18.0992 after Turkey's central bank cut its benchmark interest rate to 13% from 14% despite soaring inflation in Turkey, dragging the lira to an eight-month low.