Dollar stalls

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TOKYO: The dollar pulled back from one-month highs against a basket of currencies on Wednesday as tumbling oil prices pushed down U.S. yields, while the pound wobbled after Bank of England Governor Mark Carney shot down hopes of an interest rate hike.

The dollar index against a group of major currencies was 0.05 percent lower at 97.699.It had hit a one-month high of 97.871 on Tuesday as expectations that the U.S. Federal Reserve, which hiked interest rates last week, would tighten policy again in 2017.The greenback´s advance, however, stalled as the dollar-supportive bounce in U.S. Treasury yields was cut short overnight.

Following a big drop in oil prices, the 10-year Treasury note yield fell sharply on Tuesday, reversing a large portion of the gains it made after the Fed left the door open for another rate increase this year.

"Lower crude prices weaken inflationary pressures and in turn arrest the rise in U.S. yields," said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

"U.S. inflation indicators have not been strong to start with. Now that oil is falling, it could add further pressure to the dollar by weakening sentiment towards the U.S. energy sector.