Dollar flat as US-Iran stand-off lifts oil, yields
TLT•The dollar index was flat at 101.20 as the US-Iran stand-off pushed Brent crude up nearly 1% to $105.28 a barrel and Treasury yields rose. Markets priced in a 73% chance of a quarter-point Fed rate hike in October.
1. Oil and yields rise
The dollar was flat against major currencies on Monday as continued US-Iran tensions lifted oil prices and Treasury yields. Brent crude settled at $105.28 a barrel, up nearly 1%, after President Donald Trump rejected a peace deal with Iran. The dollar index was flat at 101.20, near a two-month high.
2. Yen remains in focus
The yen was flat at 157.39 per dollar as Japanese and US officials reiterated concern about its weakness. Marc Chandler of Bannockburn Forex said rising US interest rates were driving dollar-yen, while Japanese officials were signaling concern about the currency.
3. Markets await data
US PCE data is due Wednesday and nonfarm payrolls Friday; both are expected to be consistent with further policy tightening. Markets priced in a 73% chance of a quarter-point Fed rate hike at its October meeting. The Reserve Bank of Australia is also expected to raise rates by 25 basis points to 4.60% on Tuesday.
