Dollar holds near 18-month high as geopolitical risks rise

According to Business Recorder, the US dollar held steady in early Asian trade on Tuesday after a US market holiday, as geopolitical tensions intensified following fresh strikes on energy sites across the Middle East and Ukraine. The dollar index, which tracks the greenback against six currencies, stood at 102.56 after a 0.3% rise on Monday and remained close to its highest level since April of last year.

Chris Weston, the research chief at Pepperstone Group, a Melbourne firm, said higher interest rates relative to peers, stronger US growth and rising demand for safe-haven dollar holdings will continue to favour the currency. Costlier energy and higher yields on US Treasuries have also lent support to the greenback against its main rivals, while bond market unrest in France has weighed on the euro, which was flat at $1.1159.

Against the yen, the dollar eased 0.1% to 158.435 after Bank of Japan data showed wholesale prices climbed 6.8% over the twelve months to September, below the 7.6% median forecast. The yuan held close to its strongest level in four years at 6.6950 per dollar in offshore trading, while Brent crude dropped 0.9% to $105.74, giving back part of Monday's 1.8% advance that followed strikes on Saudi and Ukrainian energy assets.