2017.06.2100:41:00UTC+00Dollar’s Rally Halts as Oil Declines

The dollar retreated from one-month peak versus a basket of its peers as sliding oil prices drove down U.S. yields, while the pound tumbled after the Bank of England Governor Mark Carney dashed hopes for an interest rate increase.

The dollar index versus a group of its peers was 0.05 percent down at 97.699.

The greenback reached a one-month peak of 97.871 as bets that the U.S. Federal Reserve would tighten policy once more in addition to the first two rate hikes this year. But its rally was stopped as the dollar-supportive jump in U.S. yields was halted overnight.

After a steep decline in crude prices, the yield on the benchmark 10-year Treasury note fell steeply, trimming a major portion of the gains it had after the U.S. central bank signalled the possibility of another rate hike this 2017. Lower oil prices weaken inflation expectations and in turn hurt U.S. yield.

The euro was flat at $1.1137 after sliding to a multi-month low of $1.1119 overnight. Versus the yen, the dollar fell 0.2 percent at 111.220 yen, down from a near one-month high of 111.790. The pound was almost unchanged at $1.2630.