US dollar rises amid strikes on Iran
The U.S. dollar reached a weekly high against major currencies on Monday, but then partially declined amid heightened tensions between the U.S. and Iran, as well as fading hopes for a peaceful resolution of the conflict in the Middle East, Reuters reports.
Market reaction
The euro was trading at $1.1757 after falling to a one-week low of $1.1729. The pound sterling was down 0.11% to $1.3503 and the Australian dollar fell 0.27% to $0.7148.
The dollar index, which measures the U.S. currency against six others, rose to 98.30, nearing a one-week high and partially offsetting earlier losses.
The index fell 1.5% in April due to a rise in risk appetite amid hopes for peace. It rose 2.3% in March due to demand for defensive assets after the start of the conflict.
Analysts believe that subdued movements in currency markets indicate continued optimism about the resolution of the situation, despite the setbacks over the weekend.
Chris Weston of Pepperstone noted that while risks have eased at the start of the week, the market remains stable for now and does not indicate major volatile changes.
“Market participants understand that the path to an agreement has been a difficult one and remains vulnerable to unexpected changes, so sharp shifts in sentiment would not be a surprise,” Weston emphasized.
