Yen, dollar drift on Middle East concerns

The yen was little ‌changed at 157.71 per dollar after weakening for two straight sessions, while the dollar index was little changed at 99.65

Currency markets drifted on Thursday with the yen struggling to retain intervention gains and the dollar pinned near six-week lows, ​as concerns about a proposed Iran-U.S. deal left traders cautious.

The yen was little ‌changed at 157.71 per dollar in early trade after weakening for two straight sessions. It has now given back some intervention gains after touching 155.20 per dollar on Monday, but remains well off last month’s multi-decade low of about 164.

The euro was little changed at $1.1557, and sterling traded flat at $1.3469. The New Zealand dollar and ​the Australian dollar were also flat, last trading at $0.5885 and $0.7056, respectively.

The dollar index was little changed at 99.65, struggling to find direction while hovering near a six-week low.

Markets remained watchful ⁠as tensions continued to play out in the Gulf.

Brent crude futures slid 0.5% to $79.08 a barrel on Thursday, near the levels last seen when Iran and U.S. signed an interim peace ​agreement in June.

The market’s very much in sort of watch and wait mode, Ray Attrill, head of FX strategy at National Australia Bank, ​said in a podcast.

We haven’t got the oil market volatility that has really been the key driver of most markets in recent days and weeks,” he said, ‌adding ⁠that markets were waiting to see whether a deal would be struck at all, Attrill said.

Bank of Japan policymakers debated mounting price risks that likely required more rate hikes even as they raised borrowing costs to a 31-year high in June, minutes of the meeting showed on Wednesday.

That highlights growing attention within the board to broadening price pressures, further bolstering the case for another rate hike as soon as September.