Key facts
- The U.S. dollar advanced, marking its fourth consecutive session of gains.
- Heightened Middle East tensions have led to a rise in oil prices.
- Concerns about persistent global inflation remain.
- Market expectations for a Federal Reserve rate hike in September have decreased.
- Sterling declined against the dollar.
The U.S. dollar strengthened, extending its gains for a fourth straight session, as escalating tensions in the Middle East drove oil prices higher and stoked fears of sustained inflation. Investors are factoring in a reduced likelihood of an interest rate hike by the Federal Reserve at its upcoming September meeting. Sterling, meanwhile, declined for a fourth consecutive session amid concerns over government spending and its financing. The yen also showed weakness, with traders cautious about potential intervention and recent comments from policymakers regarding state pension fund allocations.