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Dollar at three-month high as markets puzzle over outlook
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Dollar at three-month high as markets puzzle over outlook
Oct 30, 2025 6:17 PM

SINGAPORE (Reuters) -The U.S. dollar held its ground in early Asian trade on Friday after reaching a three-month high as traders processed mixed signals from this week's central bank decisions, tech sector earnings and a tentative U.S.-China tariff truce. The dollar index, which measures the greenback's strength against a basket of six currencies, held steady at 99.478 after Wall Street stock market losses spooked global markets on Thursday. The U.S. dollar was down 0.1% at 153.935 yen, edging back from a nearly nine-month high after data on Friday showed core consumer prices in Tokyo rose at a quicker-than-expected 2.8% in October from a year earlier. This indicated inflation remains above target in the Japanese capital, complicating the Bank of Japan's path after it held interest rates on Thursday. "Risk aversion favours the dollar," said Rodrigo Catril, currency strategist at National Australia Bank in Sydney. "The Fed isn't sure whether it will be cutting again," he added. "And yen weakness coming from what the BOJ is doing isn't helping." Elsewhere, Japan's new Finance Minister Satsuki Katayama said on Thursday she would not stand by remarks she made in March suggesting the yen's real value is closer to 120-130 per dollar, citing her current position as minister overseeing currency policy. Traders have scaled back bets the Federal Reserve will cut rates again at its next policy meeting on December 10. Fed funds futures imply a 74.7% probability of a 25-basis-point cut then compared with a 91.1% chance a week ago, according to the CME Group's FedWatch tool. The yield on the U.S. 10-year Treasury bond was around a three-week high of 4.0989%, up 0.59 basis point compared with a previous close of 4.093%. The euro was 0.1% firmer at $1.1572 after the European Central Bank kept interest rates unchanged at 2% for the third meeting in a row on Thursday and repeated that policy was in a "good place" as economic risks recede. Against the offshore Chinese yuan, the U.S. dollar was steady at $7.1089 ahead of the release of China's October PMI data on Friday. The Australian dollar was flat at $0.6555, while the kiwi dollar was also unchanged at $0.574. Sterling was up 0.1% at $1.316.

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