US: Dollar at Nearly 1-Month High.

The dollar index extended its gains to 102.5 on Wednesday, following a 0.5% advance in the previous session, reaching its highest level in about a month. The rally came as investors increasingly priced in a more aggressive pace of Fed rate hikes in the coming months, following hotter-than-expected inflation data and increasingly hawkish remarks from central bank officials. Adding to the hawkish tone, Fed Governor Christopher Waller warned that a 50bps rate hike in December could be warranted, while Dallas Fed President Lorie Logan backed at least two further 25bps increases. Markets currently assign an approximately 86% probability to a 25bps hike at the Fed’s December meeting, while investors are also beginning to factor in additional increases in January and potentially April. Meanwhile, oil prices recovered, trimming losses following a two-day decline. The greenback strengthened against all major currencies, posting its largest gains against the Canadian dollar and the Swiss franc.