Dollar Rebounds as Hopes for Iran Peace Fade
The US dollar strengthened again after President Donald Trump's latest speech caused market participants to reduce optimism about the chances of a near-term de-escalation of the Iran conflict. Investors had previously hoped Washington would signal a clearer path toward de-escalation. However, Trump's statement was deemed insufficient to reassure investors, prompting the market to return to safe-haven assets.
The dollar's strengthening reflects a rapid shift in sentiment. As the market perceives that geopolitical risks have not yet fully subsided, appetite for riskier assets has begun to wane, while the greenback is once again sought after as a more liquid hedge. This situation demonstrates that the dollar remains one of the main assets investors rely on when global uncertainty increases.
The market's tone was also influenced by the response to Trump's speech, which was perceived as not providing a clear roadmap for peace. Despite statements that the conflict could be nearing its end, the market assessed the risk of escalation as still present. As a result, capital flows have returned to a more defensive stance.
At the same time, rising oil prices and rising US government bond yields have added strength to the dollar. This combination makes the greenback appear stronger in the short term, especially as investors begin to adjust their expectations for inflation and the direction of interest rates.
Overall, the current dollar rebound reflects a return to market caution rather than a belief that the global economic outlook is truly improving. As long as the Iran conflict remains uncertain and market sentiment remains fragile, the dollar has the potential to remain strong. (Zaf)
Source: Newsmaker.id
