Dollar near 19-month high on Fed hike bets, yen tests 160

The US dollar stayed close to its strongest level in 19 months on Friday as markets assigned a higher chance to a larger Federal Reserve rate increase next month, Business Recorder reported. The yen traded at 159.875 per dollar after briefly reaching 160 on Thursday, a level that has heightened attention to possible Japanese intervention. Japan’s finance minister said the government would respond appropriately to currency volatility.

US two-year Treasury yields climbed 34 basis points over two sessions, their steepest such rise in 3-1/2 years. Traders put the odds of a 50-basis-point Fed increase at 14.5%, compared with zero a week earlier, while the euro fell 0.1% to $1.1049 and was down 0.8% for the week. The dollar index eased 0.05% to 103.17 but remained near its highest point since April 2025.