The dollar index slipped to 99.1 on Friday after a weaker-than-expected US jobs report intensified pressure on the Federal Reserve to consider resuming interest rate cuts. Nonfarm payrolls unexpectedly fell by 92,000 in February, the largest monthly drop since October. Despite this, the dollar is still up about 1.5% for the week, underpinned by safe-haven demand as escalating conflict in the Middle East and rising oil prices roil financial markets.
The US-Israeli offensive against Iran has now entered its seventh day, while Tehran has responded with a new wave of missile and drone attacks across the Gulf. Adding to geopolitical uncertainty, former President Donald Trump said he wants a role in choosing Iran’s next leader, dismissing Mojtaba Khamenei, son of the late supreme leader, as an unlikely successor.
Higher oil prices have sharpened concerns over a resurgence of global inflation. The dollar’s strongest gains this week have been against the euro, highlighting Europe’s significant dependence on Middle Eastern oil.
