After three consecutive days of losses, the US Dollar is experiencing a surge in value due to a flight to safety amid heightened geopolitical tensions in the Middle East region.
Additionally, it has been influenced by the stronger-than-expected data from last Friday’s Nonfarm Payrolls report, which indicates a robust and resilient labor market despite actual interest rates higher levels.
However, it’s important to note that wage growth remained moderate during the reported month, which has alleviated concerns about inflation.
On the other hand, the Euro is facing losses due to the risk-off sentiment, which is favoring safe-haven currencies such as the US Dollar and Japanese Yen.
At the same time, Germany’s economic performance continues to weaken with industrial production contracting faster than expected. Deterioration in Eurozone economic activity and the looming risk of a recession are contributing to a pessimistic sentiment.
The Japanese Yen, however, is experiencing some gains against currencies other than the US Dollar today due to the prevailing risk-averse sentiment.
The yen’s strength is preventing further depreciation against the dollar, and remains below the 150 level while the possibility of an intervention from the Bank of Japan remains on the table.