By Harry Robertson and Laura Matthews LONDON/NEW YORK, July 17 The dollar was flat on Friday, on track for a weekly decline as tame U.S. inflation data led traders to cut bets on imminent rate hikes from the Federal Reserve.
Iran and the United States exchanged intensifying fire in a week-long escalation that has largely unravelled last month’s truce, spurring safe-haven bids for the dollar and pushing oil prices to near one-month highs
Meanwhile, U.S. consumer sentiment climbed to a five-month high in July, although traders said the respite may prove temporary with renewed conflict in the Middle East driving up gasoline prices. “The tech-led global equity market plunge and ongoing disruption to Strait of Hormuz traffic have triggered a flight to safety,” said Elias Haddad, global head of markets strategy at Brown Brothers Harriman. “USD recovered some of this week’s losses, and global bond yields edged a bit lower.” The euro was flat at $1.1437 and was set for a 0.2% rise in the week. Sterling fell 0.23% to $1.3449, but was on course for its third straight week of gains. The rise has reflected UK economic growth and greater political certainty, with Andy Burnham set to become prime minister on Monday and reports indicating he will pick a centrist finance minister.
The Australian dollar was poised for a third week of gains, although it was 0.24% softer on the day at $0.6979 as risk-off sentiment prevailed, with global stocks falling on Friday. THE RISK OF INTERVENTION The Japanese yen was flat, fetching 162.35 per U.S. dollar, remaining rooted near the 40-year low of 162.84 it touched at the start of the month. Traders remained wary of official intervention from Tokyo after Japanese Finance Minister Satsuki Katayama reiterated the government’s readiness to take decisive action. “We seem to sort of hit DEFCON 1 in terms of the verbal warnings for the yen overnight with the latest round of comments,” said Shaun Osborne, chief FX strategist at Scotiabank…