Sharjah24 – Reuters: The U.S. dollar remained elevated on Wednesday following its biggest surge in three weeks against major peers overnight, with Federal Reserve officials talking up the potential for further, aggressive interest rate hikes.
The greenback continued its rise versus the safe-haven yen, extending its best gain for six weeks, as U.S. Treasury yields also rebounded after House Speaker Nancy Pelosi's arrival in Taiwan was met with a strong, but not off-the-scale response by China.
New Zealand's dollar dropped following a surprise rise in the unemployment rate. Australia's currency also tumbled.
The U.S. dollar index =USD, which gauges the currency against six major peers including the yen, was 0.05% higher at 106.50, after rebounding 1% overnight following its slide to a nearly one-month low at 105.03.
The dollar rose 0.51% to 133.84 yen JPY=EBS, after jumping 1.2% on Tuesday. Earlier in the day it had sunk to a nearly two-month low of 130.40.
Benchmark long-term Treasury yields US10YT=RR, which the dollar-yen pair tends to track closely, were around 2.75% in Tokyo, holding close to overnight highs following a 14 basis point surge.
Traders now see a chance of about 44% that the Fed will hike by another 75 basis points at its next meeting in September.
The euro EUR=EBS slipped 0.1% to $1.01555, while sterling GBP=D3 lost 0.12% to $1.2144.
The Australian dollar AUD=D3 sank 0.44% to $0.689, extending a 1.52% slide from Tuesday, when the nation's Reserve Bank hiked the key rate by another half point, as expected, but opened the door to slowing the pace of tightening.
New Zealand's dollar NZD=D3 dropped 0.58% to $0.62185 after a surprise rise in the unemployment rate to 3.3% in the second quarter, when economists had predicted it would ease to 3.1%.
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