Dollar drifts as Middle East tensions simmer, oil rises
SPY•The dollar held steady against most major currencies as investors weighed Middle East tensions and oil-driven inflation concerns. Oil gained more than $1 a barrel, while the euro slipped 0.1% to $1.122 and the dollar index was little changed at 101.76.
1. Dollar steady, oil gains
The dollar held steady against most major currencies on Wednesday as investors weighed developments in the Middle East conflict, which revived safe-haven demand and raised concerns about oil-driven inflation. Oil prices gained more than $1 a barrel as tensions fuelled fears of supply disruptions, with declines in US crude and fuel inventories providing additional support.
2. Euro faces fiscal pressure
The euro slipped 0.1% to $1.122 and was down almost 1% for the month. Traders remained cautious as France faced anti-government protests and a worsening fiscal outlook, pushing its 10-year borrowing costs towards 24-year highs. Sterling was little changed at $1.33, while the pound rose against the euro for a fifth straight session.
3. Other currencies move
The yen held at 158.1 per dollar, and the dollar index was little changed at 101.76 after touching its lowest level since October 1 on Tuesday. The Australian dollar rose 0.3% to $0.7026 after Reserve Bank of Australia Deputy Governor Andrew Hauser said the inflation outlook looked “materially worse.” The New Zealand dollar slipped 0.1% to $0.568, while the Canadian dollar was steady at C$1.405.
