The dollar stayed within range of a 10-week high on Tuesday morning after retreating slightly on Monday. Support for the greenback came from renewed expectations for an interest rate hike by the Federal Reserve sometime before the end of 2017. The dollar’s recent struggles had been caused by continued fears about political discord between the United States and North Korea, as well as a bounce by the euro after data showed that German industrial output saw its biggest monthly increase in more than six years in August.
Traders are eyeing North Korea as two important political days are looming, which may be used as an opportunity for additional missile tests. The first day that both analysts and traders are wary of is today, October 10, which is the 72nd anniversary of the ruling Workers Party. The other day of note is October 18, the beginning of China’s 19th Party Congress, which could provide North Korean leader Kim Jong Un a platform for replying to the latest sanctions against North Korea.
The dollar was trading at 1.1765 against the euro as of 11:57 a.m. HK/SIN on Tuesday. It was relatively flat against the yen, trading at 112.67.
The British pound rose a half percent in early Asian trade before erasing some of its gains. The sterling was trading at $1.3155 at midday after easing 2.5 percent last week. Traders are now evaluating whether England will see its first interest rate hike in over 10 years as the Office for National Statistics showed that labor costs have increased more than expected recently. In mid-September the Bank of England began hinting that it would be willing to raise interest rates, and a rise of 50 percentage points is expected in the coming months.