Ella 
In early Asian trading on Monday, the EUR/USD continued its winning streak since last Wednesday this week, rising to around 1.0570.
Markets are closely monitoring the resumption of military conflicts in the Middle East involving Palestine and Israel. The concern is that the conflict has the potential to escalate and widen the scope of the crisis, which could impact markets due to an unclear geopolitical outlook.
The escalation of the crisis in the Middle East is likely to prompt more funds to flow into traditional safe-haven assets such as U.S. Treasury bonds, gold and the Swiss franc (CHF). Investors often seek to pursue these assets during periods of uncertainty about geopolitical crises.
In addition, the Palestinian-Israeli conflict may trigger a new rebound in oil prices and bring new inflationary pressures. Central banks and major economies may find themselves grappling with new challenges to inflation posed by these factors.
Fresh geopolitical tensions could impact the recent surge in the EUR/USD pair. Such events often lead to changes in risk sentiment, affecting currency markets as investors reassess their positions in response to the heightened uncertainty about the geopolitical crisis.
The U.S. dollar index rebounded after falling for three consecutive days and was trading around 106.20 as of press time. The U.S. dollar (USD) strengthened on Friday’s U.S. non-farm payrolls data.
U.S. Treasury yields rebounded on the possibility that the Federal Reserve (Fed) will keep interest rates higher for a long time. At press time, the 10-year U.S. Treasury yield hit its highest level again at 4.80%.
The jobs report showed nonfarm payrolls rose by 336,000 in September, beating estimates by 170,000. Non-farm payroll data for August were compiled to 227,000. However, U.S. average hourly earnings remained at 0.2% monthly in September, below expectations of 0.3%. Meanwhile, average hourly earnings showed an annualized rate of 4.2%, versus expectations of 4.3%.
