Dollar at week-high after US resumes Iran strikes; RBNZ hike hoists kiwi
- The greenback strengthened 0.2% to 162.46 yen , advancing for a fourth day to reached the strongest level since July 2.
The US dollar strengthened to a one-week high following renewed US strikes on Iran, while the New Zealand dollar surged after its central bank raised interest rates to combat inflation.
- US dollar strength after strikes on Iran.
- New Zealand's central bank interest rate hike.
- Yen's approach to a 40-year low.
SINGAPORE: The US dollar edged to its highest levels in a week in Asian trade on Wednesday as the US renewed strikes on Iran, while New Zealand’s currency jumped after the country’s central bank lifted interest rates and flagged further tightening.
The greenback strengthened 0.2% to 162.46 yen , advancing for a fourth day to reached the strongest level since July 2.
The euro slipped 0.1% to $1.1405, while the British pound nudged 0.1% lower to $1.3351.
Meanwhile, the kiwi dollar jumped 0.5% to highs of $0.5705 after the Reserve Bank of New Zealand hiked rates by 25 basis points to 2.5% to curb inflation pressures, as most economists had expected, and said “some further reduction in monetary stimulus is likely to be required” to control inflation.
The Australian dollar added 0.1% at $0.6938.
The US dollar index , which measures the currency against a basket of six peers, touched 101.210 for the first time since July 2.
Bids for the greenback, widely considered a global safe haven, came after the U.S. unleashed a new wave of strikes against Iran on Tuesday and revoked a licence allowing the country to sell oil after three tankers were attacked in the Strait of Hormuz.
“For now, the market is keeping to the playbook that Tehran and Washington are still in a high-stakes game to gain leverage during the temporary truce, and that Tuesday’s incident would not descend back into a full-scale war,” DBS analysts wrote in a research report.
“However, the incident was a reminder that the real risk remains the expiry of the interim ceasefire agreement in mid-August and the red line over transit fees in the Strait of Hormuz.”
Brent crude was up 2.5% at $76.03 a barrel in Asian morning trade on Wednesday, extending a rally into a second day.
The yen crept toward a fresh 40-year low after Bank of Japan board member Toichiro Asada, the sole dissenter to the BOJ’s decision in June to raise interest rates, told Reuters he must see signs of demand-driven inflation before supporting further hikes.
Bitcoin was down 1.3% at $62,851.94, while ether declined 1.9% to $1,749.96.
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