Investors await U.S. jobs figures and Middle East peace progress, key drivers for Fed policy and dollar direction this week.
The U.S. dollar index traded flat at 99.05 on Monday, stabilizing after a 0.4% weekly decline. Markets remain cautious ahead of U.S. jobs data and updates on Middle East peace negotiations, both critical for Federal Reserve rate expectations.
Last week’s dip reflected optimism over a potential deal to reopen the Strait of Hormuz, easing oil supply concerns. However, weekend hostilities between the U.S. and Iran renewed uncertainty, stalling further dollar moves. The currency had earlier rallied on safe-haven demand and the U.S. economy’s resilience to energy shocks.
Analysts suggest a resolution could weaken the dollar short-term, benefiting risk-sensitive currencies like the Swedish crown. Without clear progress, traders are likely to maintain a wait-and-see stance.