SINGAPORE, July 13 (Reuters) – The dollar jumped against most of its peers as a renewal of conflict in the Middle East fanned inflation fears and the prospect of rate hikes from central banks increased.
Against the yen , the U.S. dollar was up 0.1% at 161.92 yen. The euro weakened 0.1% to $1.1403 while the British pound slipped 0.1% to $1.3383.
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The Australian dollar was down 0.1% at $0.6942, while its kiwi counterpart slid 0.1% to $0.5757.
“After the flare-up into the end of last week which continued over the weekend, the dollar has responded, and the crude oil price has been the driver,” said Tony Sycamore, market analyst at IG in Sydney. “This reinflames concerns that if the energy prices rise from here, we could start to see rate hikes pulled forward.”
Traders are leaning slightly in favour of two rate hikes from the Federal Reserve by the end of the year.
Fed funds futures are pricing an implied 52.1% probability of two or more rate hikes by the time of the U.S. central bank’s December meeting, compared to a 47.6% chance on Friday, according to the CME Group’s FedWatch tool.
The U.S. dollar index , which measures the greenback’s strength against a basket of six currencies, held steady at 101.07 after rising as much as 0.2% from Friday’s close to its highest level since July 8.
Inflation risks are likely to remain in focus during the coming week, ahead of the release of U.S. CPI data on Tuesday, PPI gauges the following day, and Fed Chair Kevin Warsh’s testimony before the House and Senate, Westpac analysts wrote in a research report.
In cryptocurrencies, bitcoin was down 0.6% at $63,770.42, while ether slipped 1.1% to $1,801.28.
Reporting by Gregor Stuart Hunter; Editing by Jamie Freed
Our Standards: The Thomson Reuters Trust Principles.
Source: Original Article
