The dollar strengthened for a second consecutive day against its major counterparts in Asian trading on Monday, bolstered by robust U.S. employment figures and safe-haven demand stemming from an unstable U.S.-Iran ceasefire. The euro experienced a decline of 0.2%, trading at $1.1757. The yen also saw a decrease of 0.3%, now at 157.155 yen per dollar, while the British pound fell by 0.3%, currently valued at $1.3590. The Australian dollar, sensitive to risk, declined by 0.2% to $0.7229, whereas the New Zealand dollar fell by 0.3% to $0.5948. According to Alex Loo, factors that could impact the dollar “have become more elusive after hawkish Fed dissents, resilient U.S. data and continued stalemate in the Middle East.”
The Fed maintained its interest rates last month as anticipated; however, this decision revealed a significant division among its members, with three officials expressing dissent regarding the indication of potential future rate cuts. Oil prices surged in Asian trading on Monday, with Brent crude rising 4.5% to $105.85 a barrel. This increase followed President Donald Trump’s rejection of Iran’s response to a U.S. proposal for peace talks, extinguishing hopes for a swift resolution to the ongoing 10-week conflict. “I find it completely unsatisfactory — ABSOLUTELY UNACCEPTABLE,” Trump stated on Truth Social, providing no additional information.
The Chinese yuan strengthened by 0.1% against the dollar, reaching 6.7939 yuan in offshore trade, marking its eighth consecutive day of gains as markets anticipated a visit to China by U.S. President Donald Trump later this week. U.S. officials indicate that Trump and Chinese President Xi Jinping will engage in discussions regarding Iran, Taiwan, artificial intelligence, nuclear weapons, and critical minerals during their upcoming meeting later this week. Data released earlier today indicated that China’s producer prices exceeded expectations, reaching a 45-month high in April, driven by increasing global energy costs. The recent figures released over the weekend indicate that China’s export growth accelerated last month, driven by factories striving to fulfill AI-related demand.
The U.S. dollar index, reflecting the strength of the greenback against a selection of six currencies, recorded an increase of 0.1%, reaching 98.103. The dollar has gained support from the U.S. jobs report released on Friday, which indicated that non-farm payrolls rose by 115,000 in April, nearly double the anticipated rate. The data supported the belief that the Federal Reserve is likely to maintain current interest rates for the foreseeable future. The dollar experienced weakness last week, as market participants concentrated on the potential gradual reopening of the Strait of Hormuz, a development that could align with the upcoming Trump-Xi meeting,” strategists noted in a research report. U.S. data continues to show resilience, and the labor market seems to have stabilized across various data sets,” they noted.