Dollar traded near an 18-month high — Channel NewsAsia
In London, United Kingdom, the US dollar traded near its highest level in the past year and a half on October 12. Investors remained cautious amid the escalating conflict in the Middle East and ahead of the release of key inflation data in the United States, Channel NewsAsia reports.
Markets respond to tensions in the region
Oil prices remained volatile after Iranian-backed Yemeni Houthis stepped up attacks on Saudi Arabia. Two tankers were also attacked over the weekend. Brent crude futures fell by 0.5% to $104 per barrel.
Oil prices were also affected by US President Donald Trump's statement about an energy truce between Ukraine and Russia, the aggressor state. At the same time, the price of Brent futures was still nearly 45% higher than before the war began, while prices in some physical markets were twice that level.
The dollar index, which reflects the US currency's exchange rate against six other currencies, edged down to 102.16 but remained close to the 18-month high recorded last week. According to the US financial markets regulator, the volume of investor positions betting on a stronger dollar rose to about $36 billion in the week to October 7, from $8.4 billion three weeks earlier, mainly at the expense of the euro.
More current news is available on the UA.News Telegram channel Telegram.
Focus on US inflation
The market is awaiting a report on US consumer inflation, which is due to be released on Wednesday. It is one of the last key economic indicators before the Federal Reserve meeting this month. MUFG strategist Lee Hardman said that the dollar strengthened because of negative developments outside the United States that increased its appeal, although market participants lowered expectations for further Fed rate hikes.
Last month, the Fed raised interest rates for the first time since 2023 in an effort to curb inflation. According to CME FedWatch, traders assessed the probability of the rate remaining at its current level this month at 81%, compared with 51% a month earlier.
The euro held at $1.12 after five consecutive weeks of declines. The dollar was almost unchanged against the Japanese yen at 158.41 yen, while the pound sterling gained 0.1% to $1.3244. The Indian rupee strengthened by 1.1% to 95.7 rupees per dollar after central bank actions to ease pressure on the currency.
