Dollar wavers amid renewed Iran attacks, yen slides on pensions doubts

By Gregor Stuart Hunter and Harry Robertson

SINGAPORE/LONDON, July 13 (Reuters) - The dollar slipped connected Monday aft giving up earlier gains arsenic investors focused connected renewed hostilities successful the Gulf, portion the yen slid pursuing a Reuters ‌report that Japan had nary contiguous program to alteration authorities pension funds' plus allocations.

The U.S. currency roseate earlier successful ‌the league on with lipid prices but aboriginal mislaid ground, with the euro up 0.15% astatine $1.1433. Sterling was level astatine $1.339, portion the Australian dollar was down ​0.1% astatine $0.694.

U.S. and Iranian forces exchanged dense rocket and drone assaults astatine the weekend, with Tehran targeting U.S. facilities successful states crossed the Gulf connected Sunday and saying it had again closed the captious Strait of Hormuz shipping route.

Oil prices rose, with Brent crude futures up 3% astatine $78.50 a barrel.

The dollar index, which tracks the currency against six peers, roseate arsenic overmuch arsenic 0.3% but was past down ‌0.2% astatine 100.83.

"The dollar was evidently the large ⁠winner from the warfare past time. But it's starting from a beauteous antithetic constituent this time, having strengthened rather a batch and determination already having been a reasonably lasting repricing of the Fed outlook," ⁠said Thomas Mathews, caput of markets for Asia Pacific astatine Capital Economics successful Wellington.

"It's not wide to maine the greenback would summation arsenic overmuch this clip if the concern continued to worsen, which I deliberation is astir apt reflected successful commercialized truthful far."

Fed funds futures are pricing an ​implied ​50% probability of 2 oregon much complaint hikes by the clip of ​the U.S. cardinal bank's December meeting, up somewhat ‌from Friday, according to the CME Group's FedWatch tool.

Inflation risks are apt to stay successful absorption with the merchandise of U.S. CPI information connected Tuesday, PPI gauges the pursuing day, and Fed Chair Kevin Warsh's grounds earlier the House and Senate, Westpac analysts wrote successful a probe report.

YEN SLIDES AGAIN

The Japanese yen slid against the dollar connected Monday aft Reuters reported that Tokyo had nary imminent plans to alteration the plus allocations of its authorities pension funds.

The dollar was past up 0.2% astatine 162.05 yen, putting traders backmost ‌on alert for imaginable involution from authorities successful Tokyo arsenic the Japanese ​currency continues to languish astatine 40-year lows.

The yen and Japanese bonds had rallied ​on Friday aft Finance Minister Satsuki Katayama said the authorities ​would question ways to promote pension funds, including the Government Pension Investment Fund (GPIF), to marque greater ‌investments successful Japanese fiscal assets.