TOKYO (July 14): The dollar resumed its relentless rise on Thursday (July 14), driven by both expectations for faster US Federal Reserve (Fed) policy tightening and safe-haven flows amid growing fears of a recession.
The greenback charted new 24-year highs above ¥128 (about RM4.09) and edged back towards parity with the euro, after briefly breaching the level overnight.
The Australian dollar also marched higher after strong jobs data spurred speculation for a big Reserve Bank rate hike.
Singapore's dollar and the Philippine peso surged against their US peer after their respective monetary authorities surprised by tightening policy in off-cycle moves.
The US dollar was 0.6% higher at ¥138.235 after reaching ¥138.28 for the first time since September 1998.
The euro weakened 0.34% to US$1.0024. It touched US$0.9998 on Wednesday for the first time since December 2002.
US consumer price figures overnight showed inflation, already at four-decade highs, accelerating even further.
"The bottom line is US inflation momentum is rising," Commonwealth Bank of Australia analyst Kristina Clifton wrote in a client note.
"Stubbornly high inflation increases the risk that the Federal Open Market Committee continues to hike aggressively and triggers a recession," she said. "We expect that recession fears will continue to support the US dollar."
Traders ramped up bets that the US central bank could raise rates by 100 basis points when it meets on July 26-27. A hike of at least 75 basis points is seen as almost certain.
Atlanta Fed president Raphael Bostic added weight behind the speculation, saying the higher-than-expected inflation print puts a full-point increase on the table.
The Bank of Canada later surprised markets with a percentage-point rate, further stoking Fed bets.
The greenback was flat at C$1.29805 on Thursday after losing 0.32% overnight.
The US currency slid 0.5% to S$1.3969 after the Monetary Authority of Singapore tightened policy on Thursday outside of its scheduled meetings to combat soaring inflation.
The greenback lost 0.37% to 56.08 Philippine pesos as the central bank surprised with a 75 basis-point hike.
The Australian dollar gained 0.21% to US$0.67725, erasing an earlier loss after data on Thursday showed the jobless rate diving to a 48-year low.
Sterling slumped 0.29% to US$1.1860, sinking back toward a two-year low of US$1.18075 reached earlier in the week. It had gotten some small respite overnight from data showing the British economy unexpectedly expanded in May.