The US Dollar held near an 18-month high as Middle East conflict boosted safe-haven demand, while investors await Wednesday’s US inflation data, which could shape expectations for the Federal Reserve’s next rate move.
The Euro is on track for a fifth consecutive weekly decline after hitting a 17-month low of $1.1161, but selling pressure is easing as France’s bond market stabilises and falling US Treasury yields cool the Dollar’s rally.
The British Pound edged lower against the US dollar and euro as investors awaited a speech from Bank of England Governor Andrew Bailey. Markets are pricing in an over 80% chance of a UK rate hike next month.
The US Dollar edged higher as Brent crude climbed back above $100 and investors awaited the Fed’s September meeting minutes. The Euro, Yen and Sterling all slipped as expectations for further rate hikes shifted.
Sterling rose to a six-week high against the Euro after UK second-quarter growth was revised up to 0.5%, strengthening expectations of a Bank of England rate hike before year-end. The Pound also gained on the Dollar as Fed comments pushed back US rate hike expectations.
The Dollar edged higher, holding near a two-month peak as volatile oil prices and a sharp rise in US Treasury yields lent support. Traders are now looking to PCE inflation and nonfarm payrolls data for clues on the Fed's next move.
The Indian Rupee fell to its weakest level in more than a week, ending at 95.9825 per Dollar as Brent crude jumped nearly 4% to $108.20. Dollar sales by state-owned banks, likely for the RBI, helped limit the slide.
The Yen fell sharply against major currencies in Asian trading on Friday, with the Bank of Japan’s widely anticipated rate hike failing to reverse the currency’s decline.
The Dollar held near a seven-week high on Thursday after the Federal Reserve raised interest rates and signalled that further increases could be on the way in the months ahead.
