USD strengthens on escalating Middle East risks and strong US economic data, pushing the Dollar Index toward key resistance.
The US Dollar Index climbed to 99.35 on Wednesday, up 0.4% over three days, as geopolitical tensions in the Middle East fueled demand for the safe-haven currency. Fresh hostilities between the US and Iran raised concerns over a fragile ceasefire, while US officials maintained the truce remains intact despite Tehran suspending peace talks.
Recent US economic data reinforced the dollar’s rally, with JOLTS job openings hitting a near two-year high in April and the ISM Manufacturing PMI signaling strong activity in May. These figures bolstered expectations for a potential Federal Reserve rate hike later this year if inflation persists.
Technical indicators show moderate bullish momentum, though the index’s expanding wedge pattern typically suggests a bearish reversal. Investors remain cautious amid mixed signals from fundamentals and technicals.