Dollar gets lift from higher yields

The dollar stayed close to a two-month peak on Thursday, according to Business Recorder, as higher US Treasury yields continued to lend it support. Yields climbed partly on worries that persistent price pressures tied to the Middle East war will keep weighing on the global economy. In early Asian trade the euro was barely lower at $1.1330, after shedding nearly 2.5% in September.

US inflation rose by less than forecast in August, and July's reading was revised down, which trimmed bets on a Federal Reserve rate increase this month. Even so, inflation in the euro zone accelerated sharply, showing how costlier energy could keep straining the world economy. Sterling was flat at $1.3264 after a 2.1% slide last month, while the yen eased 0.2% to 157.82 per dollar.

The greenback, measured against a basket of major currencies, stood at 101.48 after rising 2% in September. Analysts quoted in the report said the dollar seemed more responsive to moves in 10-year Treasuries than to pricing for the next Fed hike. Global bonds recorded their steepest monthly decline in years in September, with 10- and 30-year yields reaching new highs.