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    3. 30% Chance of Rate Hike in September as Emerging Market Currencies Rebound

    30% Chance of Rate Hike in September as Emerging Market Currencies Rebound

    By: www.tokenpost.kr|2026/08/17 07:56:06
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    Emerging market currencies have rebounded in response to a weaker dollar and a retreat in expectations for U.S. interest rate hikes. The U.S. Consumer Price Index (CPI) for July was reported to have risen by 0.1% month-on-month and 3.4% year-on-year. The core CPI increased by 0.2% from the previous month and 2.5% from a year earlier. With prices not rising sharply, the market has adjusted its expectations for additional hikes at the September Federal Open Market Committee (FOMC) meeting. According to MarketWatch, the probability of a 0.25% hike in September dropped to 41.9% immediately after the CPI announcement, down from 51.7% on August 10. The Financial Times reported the probability of a September hike at 30%. The Federal Reserve maintained its target range for the federal funds rate at 3.50% to 3.75% during the FOMC meeting on July 29. This price adjustment appears to reflect a market that has lowered its expectations for further hikes rather than a shift back to easing by the Fed. The dollar index (DXY) fell to 99.452, while Asian currencies showed strength. Emerging market currencies are sensitive to U.S. interest rates and dollar movements, and a weaker dollar can have a positive impact on emerging market assets. However, the Indonesian rupiah is under pressure due to a weakening trade balance. The MSCI Emerging Market Currency Index reached an all-time high of 1,906.98, although this figure has not been independently verified. The probability of a hike in September has decreased from 51.7% on August 10 to 41.9% on August 12, and then to 30% on August 17. The retreat in Fed hike bets has also affected the strength of the pound. The minutes from the July FOMC meeting are set to be released on the afternoon of the 19th.

    -- Price

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