Dollar rises on rate hike bets, yen slips past 160
By Aboki Forex —
The US dollar strengthened on Tuesday as renewed attacks in the Gulf triggered a global bond selloff and heightened inflation concerns. The Japanese yen weakened beyond 160 per dollar, even as pressure mounted on the Bank of Japan to raise interest rates.
Renewed Gulf attacks drive oil and bond yields higher
Renewed Gulf attacks pushed oil prices higher, intensifying worries that energy costs could feed inflation. The escalation followed the first exchange of direct attacks in a month, according to the Reuters summary.
The inflation concerns contributed to a steep selloff in government bonds, sending yields higher. Broader market sentiment remained fragile as investors weighed the risk of sustained price pressures.
Dollar strengthens on US rate hike bets
The dollar gained as investors reassessed the outlook for US interest rates. Bets on a US rate hike in September increased, providing additional support for the greenback.
With inflation worries back in focus, traders moved to price in a more aggressive Federal Reserve. The renewed bond selloff added further momentum to the dollar's advance.
Yen slides past 160 despite BOJ pressure
The Japanese yen weakened beyond the 160 level, even as calls grew for the Bank of Japan to tighten monetary policy. Comments from US Treasury Secretary Bessent concerning the yen added to the pressure on the BOJ to act.
The yen's slide past the closely watched threshold keeps intervention risks alive. Markets will now watch BOJ signals and any fresh comments from officials.