Dollar Storms Back After Brief Dip, Oil Prices Defy Mideast Tensions

The US dollar saw a brief dip against the yen before rebounding strongly on Thursday. The USD/JPY pair dropped 50 pips in early trading, but quickly regained its losses and finished the day up 63 pips at 158.01.

This unexpected move came as investors digested the latest economic data, including the September ISM manufacturing survey, which showed a reading of 54.5 against an expected 55.0. The prices-paid component of the survey was particularly strong, but this brief boost to the dollar soon gave way to cautionary comments from Fed officials.

Fed's Jefferson echoed Williams' earlier suggestion that the central bank should take its time before hiking interest rates again. As a result, the odds of an October 28 hike were halved to 26%.

The oil market was also in focus on Thursday, with news reports suggesting that President Trump is considering resuming strikes against Iran. However, this had little impact on crude prices, which rose solidly higher despite reports of mounting tensions in the region.