Dollar Climbs Higher On Rate Hike Bets

(RTTNews) - The U.S. dollar scored gains against some of its major counterparts on Wednesday amid bets the Federal Reserve will tighten its policy once again to fight inflation.

Atlanta Fed President Raphael Bostic and St. Louis Fed chief James Bullard have said interest rates need to remain higher in order to tame inflation.

Bostic said that he supported another 25 basis point rate hike next month and then pausing for some time to curb high inflation.

Bullard said more rate hikes are need and the fed funds rate need to be taken to a range of 5.5 - 5.75%, to ensure that inflation is under control.

The Federal Reserve released its Beige Book report, noting U.S. economic activity was little changed in recent weeks.

The Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts, said nine districts reported either no change or only a slight change in activity while three indicated modest growth.

With regard to inflation, the Beige Book said overall price levels rose moderately during this reporting period, though the rate of price increases appeared to be slowing.

The dollar index dropped to 101.75 after climbing to 102.23 in the European session, but has edged up to 101.96 now, gaining more than 0.2%.

Against the Euro, the dollar has firmed to 1.0955 from 1.0975. The dollar is trading at 1.2437 against Pound Sterling, down from the previous close of 1.2424.

Against the Japanese currency, the dollar has strengthened to 134.81 yen, gaining from 134.12 yen.

The dollar is slightly stronger against the Aussie at 0.6714, and up against Swiss franc as well, at CHF 0.8977.

Against the Loonie, the dollar has firmed to C$ 1.3459 after oil prices tumbled on worries about outlook for demand.