Dollar Steady, US-Iran Uncertainty Supports Safe-Haven Demand
The US dollar index (DXY) held around 98.5 on Thursday, its highest level in more than a week, as the lack of progress in peace efforts between the US and Iran bolstered safe-haven demand for the greenback. Geopolitical uncertainty kept market participants on the defensive and maintained short-term support for the dollar.
Risks also stem from the Strait of Hormuz, which remains effectively closed. Tehran reportedly maintains control of the strategic waterway and has seized two ships, while the US blockade of Iranian ports continues. This has kept energy prices high, heightened inflation concerns, and heightened market sensitivity to any diplomatic updates.
President Donald Trump said the ceasefire would remain in effect indefinitely pending a new peace proposal from Iran. On the monetary policy front, persistent inflation concerns have reinforced expectations that the Federal Reserve will hold interest rates this year, while Fed chairman nominee Kevin Warsh reiterated his commitment to maintaining the central bank's independence from the White House.
The market's next focus will be on the release of weekly jobless claims and the upcoming PMI data to gauge the strength of the US economy. Stronger data has the potential to keep the dollar solid, while weaker data could test the DXY's resilience if global risk sentiment improves.
5 key points (detailed & simplified):
- The DXY held around 98.5, near its highest level in more than a week due to safe-haven demand.
- US-Iran peace efforts have not shown significant progress, maintaining defensive sentiment.
- Hormuz remains effectively closed; Iran reportedly seized two ships and the US blockade continues.
- High energy prices maintain inflation risks, reinforcing expectations that the Fed will hold interest rates this year; Warsh affirms the Fed's independence.
- The market awaits jobless claims and PMI for further signals on the direction of the US economy and the dollar's movement. (Asd)
Source: Newsmaker.id
