Dollar Falls Despite Rising Fed Hike Bets

The dollar struggled to build on gains after a stronger-than-expected U.S. jobs report, even as markets priced in about a 57% chance of a Federal Reserve rate hike this month. Investors are turning to Friday’s inflation report, with a hotter reading likely to reinforce expectations for a hike and a cooler reading potentially prompting markets to scale back tightening bets. Elevated oil prices and tensions in the Middle East are raising inflation concerns globally, increasing expectations that the European Central Bank and Bank of Japan will also raise rates and limiting the dollar’s yield advantage. The dollar index fell 0.07% to 99.09, while the yen strengthened more than 0.2% against the dollar as investors anticipated possible Bank of Japan tightening.