Forex – Dollar Steady against Currency Basket, Sterling at 1-year Highs

© Reuters. Dollar steady; Sterling at 1-year highs on UK inflation data – The dollar was steady against a basket of the other major currencies on Tuesday, as concerns over the impact of Hurricane Irma eased, while the pound surged to one-year highs after data showing that UK inflation jumped in August.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 91.93 by 08:28 AM ET (12:29 GMT).

The index rebounded 0.65% on Monday after slumping to a more than two-year low of 90.99 on Friday.

The dollar was higher against the traditional safe haven yen, with USD/JPY rising 0.27% to 109.7 after climbing 1.06% on Monday.

The dollar was boosted by relief that the economic cost of Hurricane Irma will probably be lower than had been feared.

Irma caused severe flooding many parts of Florida and knocked out power to more than 6 million homes and businesses, but damage appeared to be less severe than expected.

That relieved investors, particularly in the aftermath of Hurricane Harvey, the impact of which is expected to hit third quarter growth.

Risk appetite also recovered amid relief that North Korea did not conduct another nuclear test or weapons test over the weekend as some had feared.

The euro was a touch lower, with EUR/USD dipping 0.12% to 1.1938.

Sterling strengthened after data showing that UK inflation jumped by 2.9% from a year earlier in August, its joint highest in five years, underlining concerns over a squeeze on living costs.

GBP/USD was up 0.84% at 1.3273 from around 1.3205 earlier.

The pound rose to one-and-half month highs against the euro, with EUR/GBP down 0.95% to 0.8995.

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