Anna 
The dollar’s initial surge, fueled by reports of Israeli strikes on Iran, was short-lived as tensions in the Middle East eased. The safe-haven currency had rallied earlier in response to escalating conflict between Israel and Iran, raising concerns about heightened geopolitical risks in the region.
News of Israeli attacks on Iranian targets, including locations near nuclear facilities, had initially spurred demand for the dollar. However, subsequent reports from Iranian news agencies indicating minimal damage to the facilities led to a reversal in sentiment, causing the dollar to relinquish its gains.
Despite the retreat, the dollar is poised to conclude the week on a positive note, supported by robust U.S. economic data and persistent inflationary pressures. Investors have adjusted their expectations regarding the Federal Reserve’s monetary policy, with the likelihood of rate cuts diminishing in light of the strong economic fundamentals.
Furthermore, hawkish remarks from Fed officials, such as Atlanta Federal Reserve Bank President Raphael Bostic’s comments on potential interest rate hikes if inflation remains elevated, have bolstered the dollar’s strength. These statements underscore the central bank’s commitment to addressing inflationary pressures, contributing to the dollar’s resilience amidst shifting geopolitical dynamics.
