Dollar steadies on safe-haven demand but set for weekly decline

By Harry Robertson and Laura Matthews

LONDON/NEW YORK, July 17 (Reuters) - The dollar was level connected Friday, connected way for a play diminution arsenic tame U.S. ostentation information led traders to chopped bets connected imminent complaint hikes from the Federal Reserve.

Iran and the ‌United States exchanged intensifying occurrence successful a week-long escalation that has mostly unravelled past month's truce, spurring safe-haven bids for the dollar ‌and pushing lipid prices to adjacent one-month highs.

Meanwhile, U.S. user sentiment climbed to a five-month precocious successful July, though traders said the respite whitethorn beryllium impermanent with renewed struggle successful ​the Middle East driving up gasoline prices.

"The tech-led planetary equity marketplace plunge and ongoing disruption to Strait of Hormuz postulation person triggered a formation to safety," said Elias Haddad, planetary caput of markets strategy astatine Brown Brothers Harriman. "USD recovered immoderate of this week's losses, and planetary enslaved yields edged a spot lower."

The euro was level astatine $1.1437 and was acceptable for a 0.2% emergence successful the week.

Sterling fell 0.23% to $1.3449, but was connected people for its 3rd consecutive week ‌of gains. The emergence has reflected UK economical maturation ⁠and greater governmental certainty, with Andy Burnham acceptable to go premier curate connected Monday and reports indicating helium volition prime a centrist concern minister.

The Australian dollar was poised for a 3rd week of gains, though it was 0.24% softer ⁠on the time astatine $0.6979 arsenic risk-off sentiment prevailed, with planetary stocks falling connected Friday.

THE RISK OF INTERVENTION

The Japanese yen was flat, fetching 162.35 per U.S. dollar, remaining rooted adjacent the 40-year debased of 162.84 it touched astatine the commencement of the month.

Traders remained wary of authoritative involution from Tokyo aft Japanese Finance Minister Satsuki Katayama ​reiterated ​the government's readiness to instrumentality decisive action.

"We look to benignant of deed DEFCON 1 ​in presumption of the verbal warnings for the yen ‌overnight with the latest circular of comments," said Shaun Osborne, main FX strategist astatine Scotiabank successful Toronto.

"We've had precise significant, if not record, involution successful enactment of the yen, and present we are with dollar/yen inactive stuck astatine 162 and change. It appears arsenic if the hazard of involution successful the comparatively adjacent aboriginal is rather precocious again."

The dollar index, which measures the U.S. currency against six different units, was astatine 100.73, acceptable for a play driblet of 0.2%.

The scale deed a one-month debased earlier this week connected easing chances of a near-term complaint hike but safe-haven flows person helped ‌support the greenback.