NEW YORK, July 23 The dollar hit a fresh 40-year high against the yen and was stronger against the euro as oil prices continued to climb on rising hostilities in the Middle East and the European Central Bank kept interest rates unchanged.
Oil prices rose for a fifth straight day, with Brent touching the $100 a barrel mark for the first time since May 26, as Yemen’s Houthis said they struck two Saudi oil tankers, increasing the possibility of a second bottleneck on global oil supplies alongside the near-shuttered Strait of Hormuz
The dollar has been rising in recent days as renewed strikes in the U.S.-Iran conflict have caused a reversal in oil prices and again fanned inflation fears, in turn buoying expectations the Federal Reserve may hike interest rates. The U.S. economy is seen as more insulated from energy price shocks compared with Europe and Japan, which has also supported the dollar. The dollar index, which measures the greenback against a basket of currencies, rose 0.32% to 101.47, with the euro down 0.35% at $1.137.
The dollar was on track for its biggest daily percentage gain in a month. U.S. crude jumped 5.41% to $91.51 a barrel and Brent was at $100.42 per barrel, up 6.75% on the day. ECB HOLDS RATES STEADY The ECB kept interest rates unchanged as expected but held the door open to another increase in September, as a fresh jump in energy prices threatens to keep inflation well above its 2% target.