Dollar sweeps to 14-month high, iPhone mania builds

A robust dollar swept to a 14-month high on Tuesday as investors tweaked bets on an early hike in U.S. interest rates, burdening oil, gold and stocks in emerging markets.

As the dollar scaled a six-year peak on the yen and a 14-month top against the euro, gold sagged to a three-month low and Brent oil was at the $100-a-barrel mark.

Wall Street trading was expected to start slowly but investors were eagerly awaiting the launch of new products by Apple later in a much-hyped event in California.

Apple has fed high expectations, with promises by executives that the company's best product pipeline in 25 years is being readied inside its secretive facilities.

Giving the dollar bulls encouragement was research from San Francisco Fed economists that showed investors are pricing in a slower pace of interest rates rises than members of the Fed itself are.

The dollar index, which benchmarks the greenback against six other major currencies, climbed to a 14-month high of 84.519 before ducking back to 84.315. A break above 84.753 would take it to highs not seen since July 2010.

"(The Fed research) has reinforced the stronger dollar trend that has been in place for the last couple months," said Lee Hardman, a currency strategist at Bank of Tokyo Mitsubishi in London.

"As we move forward we think we will increasingly see monetary policy diverge between the Fed and the other major central banks, and that is likely to be supportive for further gains against the euro and the yen."

Reassessment of the U.S. rate outlook drove emerging market stocks down 0.65 percent to one-week lows, though a delay in EU sanctions fueled a rebound in Russian assets.

European shares were again subdued, having been buffeted on Monday, particularly in London, by strong signs that the campaign for an independent Scotland was gaining momentum.

The FTSE share index, Frankfurt's Dax and the CAC 40 in Paris all barely budged, while disappointing Greek data saw its stocks drop more than 1 percent and hurt Spanish and Portuguese markets.

Sterling, having seen its biggest fall in over 2-1/2 years on Monday, was steadier but stayed rooted at 10-month lows.

A second opinion poll released overnight again showed a marked increase in support for Scottish independence just nine days before the country votes on whether to break away from the United Kingdom.

The TNS poll found support for the 'yes camp had risen six points to 38 percent, just a pip behind the 'No' vote at 39 percent. That followed a weekend YouGov poll showing approval of independence at 51 percent against the unity camp's 49 percent, the first this year to find a majority for a 'Yes' vote.

DOLLAR STRENGTH

The stronger dollar remained the day's overarching theme however. Oil and gas stocks underperformed as a result of the lower crude price while European bonds were being dragged around by rising U.S. Treasury yields.

Ten-year treasuries rose back above 2.5 percent in Europe, up from a low of 2.3870 touched last Friday after a soft August payrolls report.

The greenback's momentum was beginning fade after it raced to a high of 106.33 yen, while the euro slumped as low as $1.2858. Investors were already giving the common currency a wide berth after the European Central Bank surprised on Thursday with a fresh round of stimulus.

A falling yen tends to be viewed as positive for Japanese exporters and corporate profits, and helped nudge the Nikkei share index to its highest close since January.

Other Asian markets were subdued by the dollar though the CSI300 index of leading Shanghai and Shenzhen A-share listings edged higher again, having put in its best performance in a year last week with gains of almost 5 percent.

That came as China's central bank also hiked the fixing for the yuan against the dollar to send it to a six-month high.

"The PBOC (central bank) has been set stronger midpoints since May when China's exports and trade surpluses have been recovering, guiding the yuan up gradually," said one trader.

The gains for the dollar meant pressure for commodities, with gold down at $1,255.40 an ounce after losing more than 1 percent on Monday.

Brent crude oil slumped as far as $99.36 a barrel overnight, the lowest since May 2013. But as the dollar started to flag, Brent managed to claw back above $100 with U.S. crude popping up too to $93.83.

The latest price drop has led to expectations of an OPEC output cut when Gulf Arab oil ministers gather on Thursday in Kuwait for the organization's annual meeting.

"Oil at below a $100 a barrel is a little bit risky in the current market - $100 per barrel is really a central point for oil countries," Tetsu Emori, a commodity fund manager at Japan's Astmax said.

(Additional reporting by Keith Wallis in Singapore and Wayne Cole in Sydney, editing by John Stonestreet)