Dollar treads water as US-Iran clashes, inflation data in focus

By Sophie Kiderlin

LONDON, June 10 (Reuters) - The dollar held dependable connected Wednesday arsenic markets remained connected borderline implicit the latest clash betwixt the U.S. and Iran, portion awaiting intimately watched U.S. ostentation information that could supply clues connected the ‌Federal Reserve's involvement complaint path.

U.S. President Donald Trump said connected Wednesday Iran had taken excessively agelong to negociate a woody and ‌would present "have to wage the price", portion Tehran said it would reassess diplomatic engagement with Washington aft tit-for-tat strikes overnight.

Iran launched rocket and drone attacks connected U.S. bases ​in Jordan, Kuwait and Bahrain successful retaliation for American strikes connected Iranian targets astir the Strait of Hormuz.

The dollar index, which measures the greenback against a handbasket of currencies including the yen and euro, was past dependable astatine 99.97.

The euro was level astatine $1.1541, portion sterling was small changed astatine $1.3384.

"Even with the benignant of re-upping of immoderate of the tensions successful the abbreviated term, really the wide sentiment that we spot much broadly ‌is that we're inactive person to immoderate benignant ⁠of woody oregon statement than further away," said Dominic Bunning, caput of G10 FX strategy astatine Nomura.

He said investors are besides focused connected U.S. economical information and the outlook for Fed rates, particularly with Chairman Kevin ⁠Warsh taking the helm.

"At immoderate constituent there's surely a consciousness that we'll request to spot a spot of a breakout from this benignant of holding pattern," Bunning said.

"I deliberation astir radical astir apt thin towards the broadside that the dollar volition astir apt fortify a spot much for present due to the fact that of that ​strong U.S. ​data pulse."

Later connected Wednesday, the U.S. volition merchandise user terms scale information ​for May, which is seen arsenic important successful gauging ‌whether the Fed mightiness hike rates aboriginal this twelvemonth pursuing past week's stronger-than-expected jobs report.

"If ostentation accelerates this time, expectations for further complaint hikes are apt to strengthen, pushing the dollar higher," said Sho Suzuki, a marketplace expert astatine Matsui Securities.

YEN REMAINS IN FOCUS

Meanwhile a Bank of Japan complaint hike astatine the June 16 argumentation gathering is present astir afloat priced in, meaning it is improbable connected its ain to trigger a important reversal successful yen weakness if delivered.

"It's going to instrumentality immoderate hawkish commentary from Governor (Kazuo) Ueda that signals the BOJ could ‌bring guardant its adjacent hike from December to September - with the anticipation of ​a 3rd hike earlier year-end," said Tony Sycamore, marketplace expert astatine IG, successful a ​note.

"Without that oregon thing similar, the Ministry of Finance ​will apt request to propulsion retired its cheque publication again to support the currency."