US Dollar Strengthens After Trump Offers No Certainty!
The US Dollar Index (DXY) strengthened and moved closer to the 100.00 level at the start of the European session on Thursday. The strengthening occurred after a speech by US President Donald Trump that offered no certainty about a ceasefire schedule in the Iran conflict, causing the market to reconsider geopolitical risks and demand for safe assets.
The DXY, which measures the dollar's value against six major currencies, rose as investors responded to Trump's statement from the White House. In the prime-time speech, Trump said the US's core objectives in Iran were "nearing completion" and estimated the war would last two to three weeks.
While providing an estimate of the duration of the conflict, Trump also signaled the US was prepared to escalate its military response for the remainder of the period. He threatened to take Iran "back to the stone age," emphasizing that a clear path to de-escalation was not yet clear.
This uncertainty tends to support the dollar as a safe haven in the short term, especially when conflicts in the Middle East have the potential to increase market volatility. In such situations, market participants typically increase exposure to assets considered more defensive, including the US dollar.
On the monetary policy front, higher energy prices are seen as strengthening the case for the Federal Reserve to keep interest rates steady. However, futures market participants are also starting to factor in a higher interest rate scenario, with a nearly 52% chance of a Fed rate hike by the end of 2026, according to CNBC.
The focus next shifts to the March US employment report, due on Friday. Market consensus for Nonfarm Payrolls (NFP) is 60,000, while the unemployment rate is projected to remain at 4.4%. If the data is weaker than expected, the dollar risks losing momentum against other major currencies. (asd)
Source: Newsmaker.id
