Geopolitical tensions resurface after Iran and US exchange fire, lifting the US Dollar Index above 98.00 ahead of key US jobs data.
The US Dollar Index (DXY) recovered from Thursday’s lows of 97.80 to trade near 98.20 on Friday, erasing weekly losses as Iran ceasefire hopes dim. Renewed hostilities in the Strait of Hormuz, including reported attacks on an Iranian oil tanker and US naval forces, fueled risk aversion and demand for the safe-haven USD.
Earlier in the week, the DXY had slipped below 98.00 amid optimism over a potential truce. However, Iran’s military commander accused the US of targeting civilian areas, while President Trump urged Tehran to finalize a 14-point peace plan. Markets now await April’s US Nonfarm Payrolls (NFP) report, with consensus expecting a slowdown in job growth.
ADP data earlier this week surprised positively, easing pressure on the Federal Reserve to cut rates. A stronger-than-expected NFP could further bolster the USD by reducing dovish Fed bets.