US Dollar Index flat lines above 98.00 amid Hormuz tensions
The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, currently trades near 98.20 during the Asian trading hours on Monday. The DXY steadies as traders continue to assess geopolitical tensions in the Middle East.
US President Donald Trump said the US will begin guiding some neutral ships trapped in the Persian Gulf out through the Strait of Hormuz beginning Monday. Bloomberg reported that US Navy ships will stay nearby if needed to stop the Iranian military from attacking commercial vessels in the Strait.
An Iranian official warned that US interference in Hormuz will be considered a violation of the ceasefire, adding that the Strait of Hormuz and the Persian Gulf are not a place for rhetoric. Traders will closely monitor the developments surrounding the Middle East conflict and a continued blockade of the Strait of Hormuz. Any signs of escalating tensions could lift the US Dollar as a safe-haven currency.
All eyes will be on the US employment report for April, which is due later on Friday. The US economy is expected to see 73K job additions in April, while the Unemployment Rate is projected to remain steady at 4.3% during the same period. If the report shows a weaker-than-expected outcome, this could drag the DXY lower in the near term.
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