Dollar near 19-month high on Fed hike bets, yen tests 160

The euro dropped ⁠0.1% to $1.1049, hovering near its lowest level against the dollar since April 2025. For the week, it was down ​0.8%, on track for its largest weekly loss since late September. Fed officials this week warned that US inflation remains stubbornly ​elevated, with some signalling openness to a 50-basis-point rate increase if price pressures fail to ease.

Traders are pricing in a 14.5% chance of a large hike next month, up from 0% last week, the CME Fed. Watch tool showed. Investors are also keeping an eye on ​upheaval in technology stocks in the wake of Nvidia CEO Jensen Huang's departure, in a sector already pressured by funding ​and regulatory concerns.

"If we do see a further sharp selloff in equity markets, that could be a negative for the US dollar," ‌said ⁠Carol Kong, currency strategist at Commonwealth Bank of Australia. "But I think there's a possibility it can continue its strong momentum in the near term, particularly with Fed officials speaking next week.

If we see further support for a 50-basis-point hike, there's further upside in the dollar too. "The Japanese yen was largely unchanged at 159.875 per dollar, near its lowest ​level since early September, fuelling ​intervention concerns.

Japanese Finance Minister ⁠Satsuki Katayama said on Friday that the government will respond appropriately to currency volatility as the yen briefly hit the key 160-per-dollar line on Thursday. The dollar index, which measures the ​greenback against a basket of currencies, was last down 0.05% at 103.17, remaining at ​its highest since ⁠April 2025.

The Australian dollar has fallen about 2.5% over the past month, making it the worst-performing G10 currency against the greenback and the only one where rate cuts are being priced in for next year. It was last at $0.68 in ⁠early trading.

The ​dollar was largely steady against the Swiss franc at 0.835, hovering ​near a one-month high. US crude futures closed 2.55% higher on Thursday after attacks by Yemen's Iran-aligned Houthis on Saudi energy infrastructure escalated and shipping disruptions ​persisted in the Strait of Hormuz.