"The dollar advanced on Friday, supported by higher Treasury yields and a combination of safe‑haven demand and continuing inflation concerns. Crude supply disruptions due to the closure of the Strait of Hormuz continue to drive prices to the upside, pushing markets to reassess the timing of monetary policy easing and lean toward a more cautious sentiment."
"Markets are now pricing only one interest rate cut by year-end, which could limit the downside risks for the dollar. This week's data showed that inflation remained relatively stable in February, but the focus could remain on the impact of oil prices. At the same time, low jobless claims and firmer ADP hiring underscore a resilient labour market."
"However, Middle Eastern tensions are likely to remain the main driver of the dollar. Any escalation is likely to bolster the dollar and yields further. Looking ahead, all eyes are now on today's key economic data, including GDP growth, PCE, JOLTs and durable goods orders, which could inject volatility into forex and bond markets."
The dollar advanced on Friday supported by elevated Treasury yields, safe-haven demand, and persistent inflation concerns. Crude supply disruptions from Strait of Hormuz closure drove oil prices higher, prompting markets to reassess monetary policy easing timelines toward greater caution. Markets now price only one interest rate cut by year-end, limiting downside risks for the dollar. February inflation remained stable, while low jobless claims and strong ADP hiring demonstrated labor market resilience, reducing urgency for immediate rate cuts. Upcoming economic data including GDP, PCE, JOLTs, and durable goods orders may create volatility, though Middle Eastern tensions remain the primary dollar driver.
Read at London Business News | Londonlovesbusiness.com
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