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imageNEW YORK: The US dollar jumped to a 14-month high against the euro on Tuesday as investors bet the Federal Reserve would hike interest rates earlier than expected, a view that helped knock down bond prices and weighed on global equity markets.

The dollar consolidated broad gains from Monday after research from economists at the San Francisco Fed indicated investors may be underestimating when the US central bank is likely to hike rates.

Benchmark US Treasuries yields rose to their highest in over a month and European shares slipped for a third straight session as companies that trade dollar-denominated commodities such as oil took a hit. Wall Street opened lower.

The Fed research ramped up expectations that central bankers could signal an earlier-than-expected hike in rates at their policy-setting meeting next week on Sept. 16-17.

Recent data indicating a steadily strengthening US economy also has bolstered the camp that believes rates may rise sooner than the market has expected.

"The Fed's projections for the path of interest rates are already more materially aggressive, more rapid hikes, than the market implies by its pricing," said Jake Lowery, fixed income portfolio manager at Voya Investment Management in Atlanta.

"The data over the last three months would at least give the Fed more confidence in that base case scenario," he said.

The euro fell to a 14-month low of $1.2860 in European trading before rebounding to trade 0.03 percent higher at $1.2900. The greenback rose to a six-year high of 106.39 yen , and last traded at 106.22 yen, up 0.19 percent.

The benchmark 10-year US Treasury note fell 5/32 in price to push its yield up to 2.4874.

Stocks were mostly lower worldwide, with the exceptions of Canada, where the Toronto Stock Exchange's S&P/TSX composite index was 0.1 percent higher, and the Bovespa in Brazil was up 0.07 percent.

MSCI's all-country index fell 0.43 percent to 429.04, and the FTSEurofirst 300 index of European shares slipped 0.31 percent to 1,385.07.

On Wall Street, the Dow Jones industrial average was down 58.25 points, or 0.34 percent, at 17,053.17. The Standard & Poor's 500 Index was down 5.52 points, or 0.28 percent, at 1,996.02.

The Nasdaq Composite Index was down 12.52 points, or 0.27 percent, at 4,579.77.

Brent crude oil prices fell back below $100 per barrel in volatile trade, down for a fourth day and under pressure from strong supplies.

Brent fell 35 cents at $99.85 a barrel. US crude was 57 cents higher at $93.23 a barrel.

US crude's relative strength is because it is less affected by demand weakness in Europe and because of data due later on Tuesday and on Wednesday that is likely to show a fall in US stockpiles, said Andrey Kryuchenkov, analyst at VTB Capital.

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