The Dollar Rises as Inflation Fears Grow Due to a Jump in The Energy Sector

The dollar rose on Wednesday, on concern that higher energy prices would spur inflation and raise interest rates, as traders awaited US jobs data for clues about the timing of the Federal Reserve’s tightening of policy.

The New Zealand dollar fell 0.9% to $0.6891, and the Australian dollar fell 0.7% to $0.7265.

The euro stuck under the $1.16 level and hit $1.1567 in the latest trading, slightly higher than the 14-month low of $1.1563 hit last week.

The yen fell to a one-week low of 111.79 per dollar in conjunction with rising US Treasury yields, which could attract investment inflows from Japan.

The US currency gained support as investors awaited the Federal Reserve to start reducing its asset purchases this year and paving the way for an exit from pandemic interest rate levels long before the central banks in Europe and Japan.

The dollar index rose 0.1% to 94.082.

The Canadian dollar fell from its highest level in a month and the Norwegian krone fell from its highest level in three months.

Sterling recovered from some heavy selling last week against the dollar, but lost momentum during the Asian trading session and fell 0.4% to $1.3570, just below a three-week high against the euro hit on Tuesday.