DXY Stable, Markets Wary of US-Iran Deal Uncertainty
The US Dollar Index (DXY) moved flat around 99.25 in Asian trading on Wednesday (June 3), despite heightened uncertainty over the US-Iran deal after both sides resumed their exchange of fire. Markets believe the risk of further escalation in the Middle East remains high, keeping sentiment fragile.
According to a US military statement, CENTCOM said it intercepted several Iranian ballistic missiles and drones targeting regional countries such as Kuwait and Bahrain, and conducted a self-defense attack on Iran's Qeshm Island. This development rekindled fears of a wider war, a scenario that typically drives oil prices up and supports the dollar.
The dollar tends to strengthen when tensions rise, as rising energy prices risk worsening global inflation. If inflation rises again, markets typically postpone expectations of interest rate cuts and become more cautious about the potential for tighter monetary policy, which ultimately supports the greenback.
Domestically, investors' focus is now on this week's series of US data, particularly the ADP Employment Change and ISM Services PMI for May, which will be released in the US session. This data will provide early clues ahead of the release of key employment data.
Previously, April's JOLTS Job Openings data was stronger than expected, with job openings rising to 7.618 million, well above the estimate of 6.88 million. However, the biggest trigger this week remains the US Nonfarm Payrolls (NFP) for May on Friday, which has the potential to shift market expectations regarding the Fed and the dollar's movement. (asd)*
Source: Newsmaker.id
