Dollar Rebounds as Hawkish Fed Commentary and Hot CPI Data Boost Rate Hike Expectations

The US dollar strengthened following hawkish remarks from Federal Reserve Governor Christopher Waller and the release of higher-than-expected Consumer Price Index (CPI) data, which collectively fueled expectations for further Federal Reserve rate increases. The US headline CPI rose 0.4% month-over-month, surpassing the anticipated 0.3% increase, while core CPI also climbed 0.3% month-over-month. Waller had previously stated that he would consider a 50-basis-point rate hike if October's core CPI registered around 0.3% or higher, contributing to the market's repricing of future monetary policy.