Dollar Holds Steady Amid Disruptions in Middle East Shipping Routes
The US Dollar Index (DXY) moved relatively flat, hovering around 98.00 in Asian trading on Monday (May 4), as market participants assessed the development of geopolitical tensions in the Middle East. The dollar index remained stable amid increased focus on the risk of disruptions to shipping routes.
US President Donald Trump said the US would begin guiding some neutral ships stuck in the Persian Gulf through the Strait of Hormuz starting Monday. Bloomberg reported that US Navy ships would remain in the area if necessary to prevent Iranian military attacks on commercial vessels in the strait.
From the Iranian side, an official warned that US interference in Hormuz would be considered a violation of the ceasefire. The statement emphasized that the Strait of Hormuz and the Persian Gulf are not a place for rhetoric, while the market continues to monitor potential escalation and the risk of a continued blockade.
Fundamentally, geopolitical uncertainty tends to maintain demand for the dollar as a safe-haven asset, thus containing short-term weakness in the DXY. However, the next direction remains dependent on whether tensions escalate or subside, as changes in risk sentiment can quickly shift capital flows.
Beyond geopolitical factors, market attention is shifting to the US employment report for April, scheduled for release on Friday. Consensus estimates an increase of 73,000 jobs, with the unemployment rate stable at 4.3%. A weaker-than-expected result could potentially pressure the DXY as it affects policy expectations and the market's assessment of the US economic outlook. (asd)
Source: Newsmaker.id
