The US Dollar Index remains stable around 99.00, positioning itself for a weekly increase of 0.4%. Escalating tensions between the US and Iran have prompted investors to return to the US Dollar. On Friday, US Defense Secretary Hegseth is scheduled to conduct a conference regarding the conflict in Iran. The US Dollar remains robust against its primary counterparts on Friday, with the USD Index steady at the upper range of the 98.00s, as investors exhibit caution in their risk-taking behavior. The DXY is poised for a 0.4% weekly gain amid escalating tensions between the US and Iran.

The extension of the ceasefire by US President Donald Trump this week failed to stabilize the situation, as Iran continued to keep the Strait of Hormuz closed for the eighth consecutive week, while the US military upheld its blockade of Iranian ports. Meanwhile, the peace talks are at an impasse, with no scheduled date for a new round of discussions that were anticipated to take place this week. On Thursday, Trump stated on social media that time is running out for Iran to finalize a peace agreement, while Israel issued a warning about the potential to eradicate the Khamenei dynasty and reduce Iran to a primitive state, contingent upon receiving the “green light” from the US.

Tehran’s Deputy President, Esmaeil Saqab Esfahani, has issued a warning of a “eye for an eye” response to the US, threatening to target oil facilities in Gulf countries should the US strike Iranian energy sites. In this context, US Defense Secretary Pete Hegseth and the chair of the Joint Chiefs of Staff, Dan Caine, have scheduled a press conference at 08:00 AM to provide details regarding Operation Epic Fury targeting Iran.

On the macroeconomic front, US data has provided support for the Dollar this week. The preliminary S&P Global Purchasing Managers’ Index data for April indicated robust economic activity, notwithstanding the ongoing conflict in Iran. Jobless claims increased modestly, yet remain at levels indicative of a stable labor market.