FX.co ★ DXY Rises for 3rd Day

The dollar index climbed above 99 on Friday, extending its rally for a third consecutive session, after US inflation data reinforced expectations that the Federal Reserve could raise interest rates next week. Core CPI, which excludes food and energy, rose 0.3% in August from the prior month, slightly above market expectations, while the annual rate increased 2.4%—in line with forecasts and the lowest reading since March 2021. Headline consumer prices advanced 0.4% month-on-month and 3.4% year-on-year, driven largely by higher energy costs. These figures indicate that inflation remains stubbornly elevated amid higher oil prices, tariffs, and ongoing investment in data centres. Following the release, markets priced in roughly a 90% probability of a rate hike at the Fed’s September 15–16 meeting. At the same time, oil prices remain a central concern, having recently risen above $100 a barrel as conflicts in the Middle East and the Russia–Ukraine war continue to disrupt supply.