The dollar index (DXY) rose by +0.15% today, driven by increased safe-haven demand following the breakdown of US-Iran peace talks, raising concerns of escalating conflicts in the Middle East. President Trump announced a naval blockade of the Strait of Hormuz, effective today, and warned of retaliation against Iran if its shipping routes are threatened.
In economic news, US existing home sales for March fell by -3.6% month-over-month to a 9-month low of 3.98 million, below expectations of 4.05 million. This decline contributed to a weakened outlook for interest rate differentials, with swaps indicating a 2% chance of a +25 basis point rate hike at the upcoming FOMC meeting on April 28-29. In the commodities market, gold prices dropped to a one-week low, influenced by a stronger dollar and rising global bond yields.
