Dollar Gains Amid Inflation Data Anticipation and New Russian Oil Sanctions

The dollar strengthened against most currencies, ahead of U.S. inflation data and new sanctions on Russian oil companies that raised oil prices. The yen fell due to higher oil prices and domestic factors, while European currencies reacted to market shifts. Traders await U.S. inflation data for economic insights.

The U.S. dollar rose against most currencies, notably the yen, as investors looked forward to the upcoming U.S. inflation data release, despite a government shutdown. The strengthening of the dollar was also influenced by fresh U.S. sanctions against Russian oil giants, which propelled oil prices upward.

Traders are keenly anticipating the inflation figures, which, although less critical to the Federal Reserve's current focus, could offer insights into consumer spending and economic growth. The sanctions on Russia's Rosneft and Lukoil further complicated the currency landscape, affecting the yen and other oil-import-reliant economies.

Japan's dependence on oil imports has impacted the yen significantly, coupled with domestic political shifts, leading to further depreciation. Meanwhile, European currencies experienced varied reactions, with the Norwegian crown benefitting from heightened oil prices, while the Swiss franc showed little movement following unremarkable central bank meeting minutes.

(With inputs from agencies.)