South Korea's Kospi triggers trading halt as Asian tech stocks fall
US inflation reached 3.7% in September, exceeding forecasts and prompting traders to increase bets on a Federal Reserve rate hike.
Dollar slips from 18-month high as Treasuries rally
Traders put the chance of unchanged Fed rates in October at 73%, as officials signaled they could wait for greater clarity despite strong inflation data.
The dollar index dropped 0.45% to 101.99 on October 15, retreating from the previous day's 18-month high as U.S. government bonds gained. Investors focused on concerns about debt at AI data center companies, while cautious Federal Reserve comments tempered expectations for an October rate increase.
The retreat came despite September's producer-price increase being the largest in 4-1/2 years, with both goods and services becoming more expensive. Retail sales also exceeded expectations, helped by gasoline prices, while a small rise in weekly jobless claims suggested the labor market remained stable.
CME Group's FedWatch Tool showed a 73% probability of rates staying unchanged at the October 27-28 meeting, up from 53% a month earlier. Bets on an increase had strengthened after the consumer inflation report, then eased following comments from Fed Vice Chair for Supervision Michelle Bowman and San Francisco Fed President Mary Daly that the central bank could await greater clarity.
Uto Shinohara, senior investment strategist at Mesirow Currency Management, said selling in chip shares was supporting bonds and restraining yields despite signs of inflation.
The euro recovered from an 18-month low, gaining 0.56% to $1.1218. Sterling rose 0.64% to $1.3275 after Britain's economy unexpectedly expanded 0.1% in August. The Australian dollar lost 0.77% to $0.6919 following an unexpected September employment decline, while the yen gained 0.15% to 158.08 per dollar.