Dollar gains traction as Fed speakers warn of risks from inflation

The US dollar strengthened during Tuesday's early Asian trade, nearing a two-week peak as inflation data and Federal Reserve officials' cautious remarks boosted expectations of imminent rate hikes. The US dollar index, which gauges the greenback's strength against six key currencies, stood at 102.22, edging closer to its Oct 28 high.

Analysts note the focus is shifting from determining if another rate hike will occur to how restrictive monetary policy may need to be. The euro and British pound remained flat against the dollar, while the Japanese yen and Australian/New Zealand dollars showed slight fluctuations. Fed futures now suggest a 91.9% probability of a 25-basis-point rate increase next month, up from 84% the previous day, as traders abandon the idea of a rate pause and consider a 50-basis-point hike or even a second hike in January.

The yield on US 10-year Treasuries rose 13.8 basis points to 4.996%. Cryptocurrency prices, particularly bitcoin and ether, experienced minor declines.