The dollar has posted strong gains and is on course Thursday to record its largest monthly advance in nearly a year, as traders bet that the strength of the US economy will support short-term interest rates, ahead of the release of key inflation data.
The dollar broke through the 1.14 level against the euro this week, reaching a 13-month high of 1.1325 during overnight trading before steadying in Asian trade at around 1.1353.
At 161.73 yen, the dollar is narrowly approaching its highest level in just over four decades against the struggling Japanese currency.
Dollar strength pushed the gold price below $4,000 per ounce for the first time in more than seven months, and briefly pushed bitcoin below $60,000 for the first time since 2024.
The dollar index, which measures the US currency's performance against a basket of six other major currencies, hit a 13-month high of 101.8 overnight and began the Asian trading session at around 101.6.
The war in Iran and a sharp rise in oil prices have shifted market expectations away from US interest rate cuts this year, while the hawkish tone adopted by new Federal Reserve Chair Kevin Warsh last week pushed traders to price in a rate hike by October.
The dollar hit a seven-month high against sterling overnight at 1.314, and an 11-month high of 0.8139 Swiss francs.
Volatility in equity markets added further pressure on both the Australian and New Zealand dollars.
The Australian dollar fell to 0.6890 US dollars ahead of the release of May employment data, having lost more than 1.8% since the start of the week.
The New Zealand dollar, which has fallen 1.7% this week, stabilised at 0.5640 US dollars, just above its seven-month low of 0.5631 recorded on Wednesday.
Core personal consumption expenditure data for May is due out later today. It is expected to show an increase, although forecasts point to a slowdown in inflation as oil prices retreat to pre-war levels.