The dollar strengthened on Monday as global markets remained risk-averse amid escalating geopolitical tensions and surging energy prices.
Crude oil breaking above the USD 100 threshold has revived inflation concerns, pushing US Treasury yields higher across the curve.
However, Friday’s labour market report revealed a significant deterioration in employment conditions, with the economy losing 92,000 jobs in February, its largest contraction in several months. The unemployment rate edged up to 4.4%.
At the same time, retail sales slipped modestly, signalling softer consumer momentum and raising questions about the durability of domestic demand, which could add some volatility.
Looking ahead, markets will remain focused on geopolitical developments in the Middle East, as further escalation would reinforce safe-haven flows into the dollar. Attention will also turn to Wednesday’s CPI release.
An upside surprise on inflation could further delay expectations of interest rate cuts and push both yields and the dollar higher.
Leave a Comment