On Friday, the dollar index (DXY00) increased by +0.28%, recovering from a 3-1/4 year low, driven by a surge in safe-haven demand following Israel’s military attack on Iran. Contributing factors included a rise of +5 basis points in the 10-year T-note yield and stronger-than-expected US consumer sentiment, which rose +8.3 points to 60.5, surpassing expectations of 53.6.
The dollar remains overall weak despite the recent rebound, with traders expecting a low probability of a -25 basis point rate cut after the upcoming FOMC meeting. The EUR/USD fell by -0.40% due to dollar strength and disappointing EU trade data, with April’s trade surplus at 14.0 billion euros, below expectations of 18.3 billion euros.
Additionally, Japan’s USD/JPY rose by +0.29% amidst a downward revision of its industrial production report, now at -1.1% m/m. Gold prices closed up +1.48% due to safe-haven demand influenced by the geopolitical climate, despite pressure from a stronger dollar.
