FX.co ★ Dollar Rebounds on Safe-Haven Demand

The US dollar index surged past the 98 mark on Friday, regaining ground from its multi-year lows. This rise was driven by increasing geopolitical tensions in the Middle East, which intensified the demand for safe-haven assets. The increase closely followed Israel's preemptive military action against Iran, aimed at dismantling Tehran’s nuclear program, with a commitment to sustaining the operation until the threat is neutralized. US officials clarified that there was no participation or support from the United States in this military action. Previously, the dollar had plummeted to its lowest point in over three years on Thursday, influenced by uncertainty surrounding President Donald Trump's aggressive trade policies, which included fresh threats of imposing unilateral tariffs. The dollar also faced downward pressure from consumer and producer inflation figures that were weaker than anticipated, bolstering predictions of further interest rate cuts by the Federal Reserve later this year. Investors are now looking forward to the University of Michigan’s consumer sentiment report for June, which could provide valuable insights into how evolving tariff policies are impacting consumer confidence.