Asian currencies mixed as dollar hits two-month high; RBA hike in focus

Asian currencies traded mixed Tuesday as the dollar held near a two-month high, with the yen weakening toward recent lows and the Australian dollar awaiting a widely expected rate hike. The dollar index stood around 101.21, on track for its best monthly gain since June. Rising US Treasury yields, at multi-year highs, supported the dollar, though gains were limited as markets awaited US inflation and jobs data later this week. The yen weakened to about 157.36 per dollar despite intervention warnings from Japanese officials, while the RBA was expected to raise rates to 4.60%. Oil price volatility and geopolitical uncertainty over US-Iran tensions kept energy supply risks elevated, with Brent around $106 a barrel. Markets now price over 70% odds of a Fed rate hike in late October, up from 57% a week ago.