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The US Dollar experienced a significant rally following escalating tensions in the Middle East and comments from Federal Reserve Chairman Powell suggesting a less dovish stance on interest rates. The US Dollar Index reached a seven-day high as investors sought safe havens amid geopolitical uncertainty.
Key factors driving the US Dollar’s strength include:
Geopolitical Risks: Rumors of Iran planning to launch ballistic missiles into Israel triggered a risk-off sentiment in global markets. Jerome Powell’s comments hinted at a potential pause or reversal in interest rate cuts, bolstering the US Dollar.
The JOLTS Job Openings report showed a robust US labor market, further supporting the greenback.
Despite mixed economic data, the US Dollar’s appreciation was primarily driven by these factors. Investors closely monitored the situation in the Middle East and anticipated the upcoming Nonfarm Payrolls report.
