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Dollar rebounds as Middle East tensions spur risk aversion
The USD Index recovered after two days of losses, holding marginal gains near 100.80 as traders focused on US economic data and renewed strike headlines.
The US dollar stayed resilient early Friday, extending its rebound as investors weighed fresh Middle East developments and adopted a more risk averse stance, according to FXStreet.
FXStreet cited the USD Index's recovery after a two day slide, noting it moved back into positive territory on Thursday. The outlet also pointed to upbeat Initial Jobless Claims as a factor behind the dollar strength.
In the background, the article said the United States carried out strikes for a sixth night in a row, targeting Southern Iran, with reports from Bandar Abbas indicating damage to civilian infrastructure such as power facilities and a train station. It also referenced a Reuters report that Iran has asked Yemen's Houthi militia to stand ready to close the Red Sea oil route if US strikes hit Iranian power infrastructure.
Attention later in the day will turn to US data including the Export Price Index, Import Price Index, and June Housing Starts, along with a University of Michigan release of the preliminary Consumer Sentiment Index for July, FXStreet said. The piece added that Fed Vice Chair Philip Jefferson delivered a moderately hawkish but balanced message late Thursday, with a Speechtracker score only slightly above the historical average, underscoring a data dependent posture.