The US dollar index climbed above 98 on Friday, rebounding from multi-year lows as escalating geopolitical tensions in the Middle East fueled demand for safe-haven assets. The move followed Israel’s preemptive strike on Iran, targeting Tehran’s nuclear program and pledging to continue the operation until the threat is removed.
US officials confirmed there was no American involvement or support in the strike. The dollar had slumped to over three-year lows on Thursday, pressured by growing uncertainty surrounding President Donald Trump’s aggressive trade stance, including renewed threats of unilateral tariffs. Additional downward pressure came from softer-than-expected consumer and producer inflation data, which reinforced expectations for further interest rate cuts by the Federal Reserve this year. Looking ahead, investors await the University of Michigan’s consumer sentiment report for June, which could offer insight into how evolving tariff policies are affecting household confidence.
