The dollar was well bid as market focus remained fixed on increasing inflationary pressures and the likelihood that US interest rates will continue rising. The series of manufacturing surveys across the industrial world yesterday all revealed a jump in the prices paid component. In the ISM manufacturing survey which measures the performance of the sector in the US, the prices paid component surged to its highest level since October 2004. "Clearly energy prices are leaving their mark, but how long will it be before this feeds into the wider economy,"said Mitul Kotecha at CALYON. And the US rate setting body -- the Federal Open Market Committee -- has noted its concerns about such pressures. There has been a shift in the emphasis on the inflationary rather than growth impact of higher energy prices, he added. "This has not gone unnoticed by interest rate markets, with 10-year US Treasury yields adding close to 40 bps since the end of last month and short-term rate expectations also tightening sharply," said Kotecha. The Fed funds futures market is fully pricing in a rate hike in November and rating highly the chance of another increase in December. The US Fed put up the benchmark Fed Fund rate to 3.75 pct at its last meeting in September and the next rate verdicts will come on Nov 1 and Dec 13 respectively. "In turn, this has helped propel the dollar higher," said Kotecha. The question now is how much further the dollar can rise as the yen is already at its lowest since May 2004 and the euro at levels not seen since July. "The dollar is reaching critical resistance levels against the yen and European currencies," BNP Paribas analysts said in a research note.