NEW YORK: The US dollar held near its highest level in almost five weeks on Tuesday, as traders weighed the prospect of a Federal Reserve interest-rate hike this week, even as falling oil prices eased some inflation concerns.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, was about flat at 101.49, near the highest since June 25.
The euro was up 0.5 percent to USD1.13725, while sterling rose 0.1 percent to USD1.3302. Against the Japanese yen, the dollar rose 0.1 percent to 163.83 yen.
The dollar’s resilience reflects a sharp repricing of Fed expectations in recent months. Treasury yields have climbed steadily since April as the US-Iran conflict stoked concerns about inflation and a hawkish debut from Fed Chair Kevin Warsh reinforced expectations of higher interest rates.
Traders have been on intervention watch as the yen’s relentless decline drove it to a fresh 40-year low.
The BOJ is expected to keep the prospect of further rate hikes alive to support the currency, though policymakers are likely to remain vague on the timing and pace of any tightening.
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