The US dollar was on track for its biggest monthly gain in nearly a year, boosted by safe-haven bets amid the US-Iran war in the Middle East and expectations of Federal Reserve interest rate hikes.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, was a shade higher at 101.36. It is now on track for a 2.5% gain for June, which marks the biggest monthly advance since July last year, Reuters reported.
The euro was flat at $1.1387 after hitting a 13-month low against the dollar last week, and was on track for a 2.3% monthly decline. Sterling traded 0.1% lower at $1.3198 and was down 2% for the month. The Japanese yen last traded at 161.75, continuing to languish near a 40-year low.
The risk-sensitive Australian dollar fetched $0.6885, down 0.1% in early trade and heading for a 4.1% monthly decline. The New Zealand dollar was little changed at $0.5635, down 5.9% for the month, Reuters reported.
The US-Iran war escalated during the weekend as both the countries traded fresh barbs before they agreed to stop tit-for-tat attacks and meet in Qatar on Tuesday.
The renewed conflict in the Middle East has continued to stoke inflation pressures, while a surprisingly hawkish comments from the US Federal Reserve chairman Kevin Warsh earlier in the month has reversed market expectations for US rate cuts this year.
Investors now await the US non-farm payroll and unemployment rates due this week, which could offer fresh clues on the strength of the labour market and the outlook for Fed policy.
Meanwhile, crude oil prices rose following strikes that again slowed energy shipping in the Strait of Hormuz, supporting safe-haven demand for the greenback.
(With input from agencies)
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
