NEW YORK: The dollar drifted higher against most peers, particularly the yen, on Thursday as traders waited for the delayed release of US consumer inflation data on Friday and weighed fresh US sanctions on Russian oil companies, which boosted oil prices.
The US currency was last up 0.45 percent on the yen at 152.640 yen, while the US dollar index, which measures the greenback against a basket of currencies, was last up 0.01 percent at 98.94.
The week’s main scheduled focus is the inflation data being released despite the US shutdown, to assist the US Social Security Administration with its annual cost-of-living adjustment for 2026.
Although the Federal Reserve’s policy-setting focus has shifted from inflation to the state of the US labor market, the numbers will be closely watched.
“The data will be significant for slightly different reasons to normal. Clearly the Fed has moved on from CPI, but we can still take that data and make some assumptions about consumer spending and growth,” Nick Rees, head of macro analysis at Monex Europe, said.
New US sanctions on major Russian suppliers Rosneft and Lukoil over Russia’s war in Ukraine sent oil prices up nearly 5 percent on Thursday, following British sanctions on the same two companies last week.
The US Treasury Department said it was prepared to take further action as it called on Moscow to agree immediately to a ceasefire.
Multiple trade sources told Reuters that Chinese state oil majors had suspended purchases of seaborne Russian oil from the two companies, providing a further boost to prices.
The new sanctions were weighing on the yen, as well as other currencies tied to oil imports, said Marc Chandler, chief market strategist at Bannockburn Capital Markets.
“Japan’s a big importer of oil, and higher oil prices hurt,” he said.
Domestic factors also weighed on the yen, which was heading back towards last week’s seven-month low of 153.29 yen per dollar, which it hit this week after Sanae Takaichi, widely viewed as a fiscal and monetary dove, was chosen to lead Japan’s ruling party.
Now that Takaichi is installed as prime minister, the market is awaiting details of a stimulus package.
“Buying based on policy hopes from a Takaichi government has already run its course,” said Yutaka Miura, senior technical analyst at Mizuho Securities.
Smaller European currencies also attracted some market attention on Thursday, with the Norwegian crown appreciating on the rise in oil prices.
The dollar was last down 0.37 percent on the Norwegian currency at 9.978 crowns, dipping below the 10-crown level for the first time in two weeks, while the euro hit a one-month low of 11.568 crowns.
Elsewhere, sterling was down a touch at USD1.333 having bounced back from some of its Wednesday fall on weaker-than-expected consumer inflation data that caused markets to increase their bets on another Bank of England rate cut this year.
The euro was up 0.06 percent at USD1.162.
The Swiss National Bank’s first published meeting minutes did little to move the franc, which was weaker at 0.7955 per dollar.
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