Dollar hits 19-month high as Fed hike bets grow, yen tests 160

The dollar held near a 19-month high on Friday, driven by rising bets on a larger Federal Reserve rate hike, which pushed the Japanese yen back toward the key 160 level and kept traders alert for possible intervention. Treasury yields rose after President Donald Trump said the US does not need a deal with Iran, with two-year yields posting their sharpest two-day rise in 3-1/2 years. Fed officials warned inflation remains elevated, and traders now price a 14.5% chance of a 50-basis-point hike next month, up from 0% last week. The euro fell 0.8% for the week, its largest loss since late September, while the Australian dollar dropped 2.5% over the past month, the worst G10 performer. Japanese Finance Minister Satsuki Katayama said the government will respond appropriately to currency volatility after the yen briefly hit 160 per dollar on Thursday.