US economic resilience and persistent geopolitical tensions lift the dollar as Treasury yields rise above 4%.
The US dollar strengthened modestly as front-end Treasury yields climbed above 4%, driven by resilient economic data and elevated Brent crude prices. Geopolitical tensions between the US and Iran kept oil prices high, reinforcing dollar support amid a carry-driven bid.
ADP employment rose to 122k in May from 105k in April, exceeding consensus expectations of 120k. ISM services also beat forecasts, climbing to 54.5 from 53.6, with new orders surging to 57.3. However, services employment dipped into contractionary territory at 47.9.
The data solidified expectations for a prolonged Fed rate hold, impacting Asian currencies like JPY, KRW, and SGD, which are sensitive to US rate shifts.