TOKYO Reuters -- The dollar rose to a two-week high versus the yen on Wednesday, lifted by higher Treasury yields as global inflation worries flared anew.
The dollar index, which measures the currency against six major peers, rose 0.19% to 101.94, extending a 0.38% rally from Tuesday, when consumer inflation in the euro-area soared to a new record.
The dollar climbed 0.28% to 129.07 yen, and earlier touched 129.185 for the first time since May 18.
The benchmark 10 year Treasury yields touched 2.884% overnight, the highest since May 19.
The euro fell 0.15% to $1.0718 after the European Central Bank shifted its hawkish posture to a more hawkish posture after it fell to a more than one-month peak of $1.0787 on Monday.
The dollar index swooned to a one-month low of 101.29 on Monday after pulling back from a nearly two-decade high above 105 reached in mid-May, as U.S. inflation and other indicators showed signs of peaking amid the Federal Reserve'sFederal Reserve's aggressive policy tightening.
Markets have priced half-point interest rate rises for the Fed's meetings this month and next, which is in line with what policymakers have been signalling, but the outlook beyond that is murky.
A weekly U.S. jobs report, due on Friday, may offer new clues.
Westpac strategists wrote in a client note that it was too early to call the long-term DXY peak.
An aggressive 180 bp in ECB rate hikes is priced through to end of 2023, about the same as the Fed, yet it's hard to see the ECB moving toe to toe. They wrote that the dollar index could range between 101 and 105 for a while before its bull trend resumed.