Greenback crawls higher ahead of ECB, US inflation data

Global bond yields have climbed to multi-decade highs due to renewed inflation concerns, as the US dollar edged higher on Thursday, recovering some of the week's losses caused by rising oil prices and bond yields. The euro held near two-week highs ahead of an anticipated European Central Bank (ECB) rate hike. Oil prices surged as much as 1.5 percent to $102.72 a barrel, following a significant wave of attacks on shipping by Iran and the US since the beginning of their conflict.

Fears of inflation ahead of the European winter, coupled with higher prices for refined fuels, such as heating oil and natural gas, also added to the concerns. The ECB is expected to raise eurozone rates for the second time since the war began in late February. Despite global bond yields nearing multi-decade highs, the US dollar has not seen a significant boost, as markets have become less sensitive to oil shocks due to the ongoing war.

The Treasury, alongside the Bank of Japan (BOJ), intervened to support the yen in late July, selling euros instead of US dollars. US inflation data, including producer prices due on Thursday and consumer prices on Friday, will be crucial for the yen outlook and may influence the US Federal Reserve's decision on interest rates during its September 15 and 16 meeting.