Dollar's Safe-Haven Rally Amid Geopolitical Tensions
The dollar strengthened as Middle East tensions escalated, reaffirming its safe-haven status. Central banks in Europe left rates unchanged, responding to uncertainty. The Federal Reserve maintained its stance, while geopolitical and tariff-related risks persisted, influencing market sentiment. The dollar index reached its highest weekly gain since February.
The dollar gained ground on Thursday as escalating Middle East tensions overshadowed market activities, reinforcing its status as a safe-haven currency. A series of rate decisions across Europe underscored the challenges central banks face amidst increasing uncertainty.
Iran and Israel intensified their conflict with fresh air attacks on Thursday, heightening fears of possible U.S. involvement. President Donald Trump has left the world guessing about America's potential participation in Israeli strikes on Iranian nuclear sites. Notably, the Federal Reserve and the Bank of England both left rates unaltered, citing global instability and ongoing inflation concerns as critical factors.
Meanwhile, the Swiss franc strengthened against the dollar following a rate cut from the Swiss National Bank, whereas the surprise decision came from the Norges Bank, which executed a 25 bps rate cut. The dollar and the euro both surged by 1% against the Norwegian crown. Despite this, the crown remains one of the top-performing currencies against the dollar this year.
(With inputs from agencies.)
ALSO READ
Lee Jae-myung's Ambitious Plans for South Korea: Diplomacy, Economy, and Unity
Impact of Trump's Tariffs on U.S. Economy
Maharashtra's Ambitious Path to a Trillion-Dollar Economy by 2030
SA Launches Coastal Climate Plan to Protect Economy, Ecosystems, and Lives
Trade Turmoil Impacts U.S. Labor Market and Economy
Google News