The dollar index held above 100 on Monday after rising for four consecutive sessions, supported by safe-haven demand as the Middle East conflict entered its fifth week with no resolution in sight. Tensions escalated after former President Donald Trump said the US could “take the oil in Iran” and seize its export hub on Kharg Island, drawing a parallel with the US military operation in Venezuela earlier this year. The US is also reportedly preparing for weeks of ground operations in Iran following the deployment of additional troops to the region.
At the same time, Iran-backed Houthi militants in Yemen entered the conflict after targeting Israel over the weekend. Surging oil prices stemming from the Iran war reinforced expectations of a more hawkish Federal Reserve, with markets now pricing in the possibility of an additional rate hike this year.
Investors are turning their attention to a slate of key US labor market data due this week, including the JOLTS job openings report and the ADP private payrolls figures. The March nonfarm payrolls report is also scheduled for release on Friday, even though capital markets will be closed for the Good Friday holiday.
