Dollar slips as in-line CPI tempers rate-hike bets

Oil prices rose in volatile trade on Wednesday after attacks on two ships reinforced worries about disruptions to Middle East supplies and as talks to end the Iran war hit an impasse.

The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.12% to 99.69, with the euro EUR= up 0.12% at $1.1554.

The Japanese yen JPY= strengthened 0.3% against the greenback to 158.84 per dollar. It has pared gains that were made during the joint intervention in late July by U.S. and Japanese authorities to strengthen the Japanese currency.

"The release of the latest CFTC report at the end of last week did show that that intervention triggered a sharp squeeze of speculative short yen positions," said Lee Hardman, senior currency economist at MUFG.

"If there is no change in fundamentals, speculators will be encouraged to rebuild short yen positions at a time when stable financial market conditions remain supportive for carry trades," he added.