U.S. Dollar Higher On Inflation, Fed Tightening Concerns

(RTTNews) - The U.S. dollar climbed against its major counterparts in the European session on Thursday, as a spike in oil prices intensified concerns over inflation and an aggressive monetary policy tightening by the Federal Reserve.

Oil prices rallied after the Organization of the Petroleum Exporting Countries and allies decided to cut output by 2 million barrels per day, the most since 2020.

Strong U.S. ISM services PMI data and ADP private sector jobs report released overnight coupled with hawkish comments from San Francisco Federal Reserve President Mary Daly further supported the currency.

Daly reiterated on Wednesday that the Fed is determined to bring inflation down and rates would be raised to restrictive territory to address it.

The benchmark yield on the 10-year treasury note climbed to 3.765 percent. Yields move inversely to bond prices.

U.S. non-farm payrolls data due on Friday could offer more clues on the Fed's rate hike path in the future.

The greenback advanced to 144.81 against the yen and 0.9850 against the euro, following its early lows of 144.38 and 0.9927, respectively. The greenback is seen facing resistance around 148.00 against the yen and 0.96 against the euro.

The greenback rose to 1.1241 against the pound and 0.9875 against the franc, up from a previous low of 1.1383 and a 6-day low of 0.9780, respectively. The greenback is likely to face resistance around 1.10 against the pound and 1.00 against the franc.

The greenback firmed to 0.6448 against the aussie and 0.5688 against the kiwi, after dropping to a 2-day low of 0.6541 and near a 2-week low of 0.5814, respectively in the previous session. Should the greenback strengthens further, it is likely to test resistance around 0.60 against the aussie and 0.55 against the kiwi.

The greenback reversed from an early low of 1.3564 against the loonie and was worth 1.3690. The greenback may challenge resistance around the 1.41 mark.

Looking ahead, Canada Ivey PMI for September is set for release in the New York session.