Dollar Regains Strength, Driven by Risk-Off Momentum and Solid US Data
The US dollar index (DXY) strengthened again on Thursday (April 2nd), climbing back above the 100 level, supported by risk-off sentiment after a speech by US President Donald Trump dampened hopes for an imminent end to the Iran war. Trump repeated his aggressive rhetoric, including threats of a "very strong" attack on Iran and calls for allies to "courage" to secure the Strait of Hormuz, driving the greenback's broad appreciation.
On the geopolitical front, Iranian President Masoud Pezeshkian responded in an open letter to the US public, questioning whether the war was in line with Trump's "America First" pledge. Meanwhile, Israel and Iran reportedly continued to exchange missile and drone attacks, while Tehran described Washington's demands for a peace deal as "maximalist and irrational," maintaining high uncertainty.
The dollar's strength was also supported by better-than-expected US data. The ADP Employment Change showed a gain of 62,000 jobs in March (above expectations of 40,000), while February's reading was revised upward to 66,000. The ISM Manufacturing PMI rose to 52.7, the highest since July 2022, although the headline optimism was overshadowed by higher costs and a weaker employment component.
The next focus is Friday's Nonfarm Payrolls release, with market consensus forecasting a gain of 60,000 jobs after a contraction of 92,000 in February—this data is seen as crucial for shaping expectations of the Fed's policy direction and the dollar's movement across currencies.
Source: Newsmaker.id
