Dollar holds gains, yen slips as Mideast energy shock deepens

The U.S. dollar strengthened on Friday as concerns of Middle East energy supply disruptions intensified, pushing up bond yields and oil prices. The U.S. dollar index remained steady at 99.081, holding its highest level since early September. This was driven by risk-averse flows and higher energy prices, indicating a 70% chance of a Federal Reserve interest rate hike next week, according to analyst Tony Sycamore.

Brent crude futures climbed 1.2% to $108.96 a barrel, breaching the $100 mark as trading resumed in Asia. The Japanese yen slipped against the dollar, strengthening by 0.1% to 154.615 yen. The euro also strengthened by 0.1% to 179.49 yen following a European Central Bank interest rate hike. Meanwhile, the Australian dollar and New Zealand dollar remained flat and slightly higher against the greenback, respectively. Markets are now awaiting U.S. CPI data release later Friday before the Fed's meeting next week.