On Monday, the dollar index rose by 0.25%, driven by increased safe-haven demand amid escalating tensions in the Middle East and a significant 4% surge in WTI crude oil prices. The rise in the dollar was further supported by better-than-expected U.S. factory orders, which increased by 1.5% in March, surpassing predictions of 0.6% and marking the largest gain in four months.
Heightened tensions between the U.S. and Iran have led to increased demand for the dollar. Recent incidents, including an Iranian drone attack in the UAE and a cargo ship attack in the Strait of Hormuz, underscore ongoing conflicts over the strategic waterway. The U.S. military has been actively countering Iranian drone and missile attacks to ensure safe passage for vessels in the area.
In the Eurozone, the euro fell by 0.16% on the same day, facing downward pressure from the stronger dollar and higher oil prices. The May Sentix investor confidence index rose unexpectedly by 2.8 to -16.4, contrasting with predictions of a drop. The European Central Bank is anticipated to raise rates by 25 basis points at its June 11 meeting, with a 99% probability assigned to this move.
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