The U.S. dollar held steady on Tuesday ahead of key U.S. inflation data, after the conflict involving Iran pushed oil prices higher, while the Japanese yen remained under pressure amid speculation that authorities could intervene to support the currency.
The U.S. Dollar Index, which measures the greenback against a basket of major currencies including the yen and the euro, was little changed at 101.27.
Market attention remains focused on inflation data, with the U.S. Consumer Price Index (CPI) for June due later on Tuesday, followed by the Producer Price Index (PPI) on Wednesday. Investors are also awaiting the first semiannual congressional testimony of Federal Reserve Chair Kevin Warsh.
Concerns over escalating tensions between the United States and Iran resurfaced after President Donald Trump announced on Monday that Washington would reimpose a naval blockade on Iran and keep the Strait of Hormuz open in exchange for transit fees, following a renewed exchange of missile and drone attacks.
Oil prices climbed more than 9% on Monday to their highest level in a month. In early Tuesday trading, U.S. West Texas Intermediate (WTI) and Brent crude futures rose by more than 2%, reaching their highest levels since mid-June.
The euro was little changed at $1.1383, while the British pound traded at $1.3347.
The Japanese yen remained broadly stable at 162.40 per dollar, keeping traders on alert for possible intervention by Tokyo, as the currency continues to hover near its weakest level in four decades.
The yen weakened against the dollar on Monday after Reuters reported that Tokyo has no immediate plans to alter the asset allocation of its government pension funds, reducing expectations of near-term support for domestic assets.
However, the yen and Japanese government bonds had strengthened on Friday after Finance Minister Satsuki Katayama said the government would explore ways to encourage pension funds, including the Government Pension Investment Fund (GPIF), to increase investments in Japanese financial assets.
Elsewhere, the Australian dollar traded at $0.6915, while the New Zealand dollar gained 0.24% to $0.5762.
In cryptocurrency markets, Bitcoin rose 0.23% to $62,293.66, while Ether gained 0.56% to $1,775.54.
Source: Reuters
