This is Why the DXY Strengthened!
The US Dollar Index (DXY) strengthened to around 99.87 during the Asian trading session on Monday (April 6). This strengthening was supported by stronger-than-expected US employment data, amidst increasing geopolitical uncertainty in the Middle East.
Data from the Bureau of Labor Statistics (BLS) showed the US economy added 178,000 jobs in March, reversing from a decline of 133,000 in February (revised from -92,000). The March figure also exceeded market expectations of a 60,000 increase, while the unemployment rate fell slightly to 4.3%, largely due to a shrinking labor force.
Following the release, market expectations pointed to a tighter interest rate policy for longer. Futures contracts indicated virtually no chance of a rate change at the April 28–29 FOMC meeting, and a roughly 77.5% probability that the Fed would stay on hold until the end of the year, according to CME FedWatch.
Geopolitical factors also strengthened the dollar's safe-haven support. US President Donald Trump set a Tuesday deadline for Iran to reopen the Strait of Hormuz, threatening to attack power plants and bridges if it failed to do so. Iran has vowed to retaliate against its infrastructure and target similar infrastructure owned or linked to the US.
The market now awaits the release of the US ISM Services PMI for March, scheduled for Monday. If services data comes out weaker than expected, the DXY's upside potential could be limited in the short term as market participants reassess the strength of the US economic momentum. (asd)
Source: Newsmaker.id
