Dollar at week-high after US resumes Iran strikes; RBNZ hike hoists kiwi

By Gregor Stuart Hunter

SINGAPORE, July ‌8 (Reuters) - The U.S. ​dollar edged ​to its highest levels in a week in Asian trade on Wednesday as the U.S. renewed strikes on Iran, while New Zealand's currency jumped ‌after the country's central bank lifted interest rates and flagged further ⁠tightening.

The greenback strengthened 0.2% to 162.46 yen, advancing for a fourth day to reached the strongest level since ‌July 2. The euro slipped ‌0.1% to $1.1405, while the British pound nudged 0.1% lower to $1.3351.

Meanwhile, the kiwi dollar jumped 0.5% to highs of $0.5705 after the Reserve Bank of New Zealand hiked rates by ​25 basis points to 2.5% to curb inflation pressures, as most economists had expected, and said "some further reduction in monetary stimulus is likely to be required" to ⁠control inflation.

The Australian dollar added 0.1% at $0.6938.

The U.S. dollar index, which measures the currency against a basket of six ​peers, touched 101.210 for the first time since July 2.

Bids for the greenback, widely considered a global safe haven, came after the U.S. ​unleashed a new wave of strikes against Iran ‌on Tuesday and revoked a licence allowing the country to sell oil after three tankers were attacked in the Strait of Hormuz.

"For ⁠now, the market is keeping to the playbook that Tehran and Washington are still in a high-stakes game to gain leverage during the temporary truce, and that Tuesday’s incident would not descend back ⁠into a full-scale war," DBS analysts wrote in a research report. "However, the incident was a reminder ​that the real risk remains the expiry of the interim ceasefire agreement in mid-August and the red line over transit fees in the Strait of Hormuz."

Brent crude was up 2.5% at $76.03 a barrel ‌in Asian morning trade on Wednesday, extending a rally into a second day.

The yen crept toward a fresh 40-year low after Bank ‌of Japan board member Toichiro Asada, the sole dissenter to the BOJ's decision in June to ⁠raise interest rates, told Reuters he ‌must see signs of ​demand-driven inflation before supporting further hikes.

Bitcoin was down 1.3% at $62,851.94, while ether declined 1.9% to $1,749.96.

(Reporting by Gregor Stuart Hunter; Editing by Stephen Coates and ‌Kevin Buckland)

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