Dollar firms as Fed signals rate hikes on inflation risks

The US dollar held near a two-week high after a hotter-than-expected inflation report and hawkish Federal Reserve comments fueled bets on a December rate hike. The dollar index steadied at 102.22, approaching its highest level since October 28. US consumer prices rose more than expected in October, driven by higher food and accommodation costs. Fed officials signaled unease over inflation, prompting traders to price in a 91.9% chance of a 25-basis-point rate hike at the December 9 meeting, up from 84% a day earlier. The 10-year Treasury yield climbed 13.8 basis points to 4.996%. The euro and pound were flat, while the yen held steady. Bitcoin and ether traded near three-month lows, down 0.3% and 0.5% respectively. Markets also assigned better-than-even odds to a second hike in January.