Dollar Rebounded Last Week Amidst Persisting Middle East Uncertainty

(RTTNews) - The Dollar Index rebounded during the week ended April 24, amidst an uncertain geopolitical situation in the Middle East and lack of clarity about a deal to end the conflict. The Dollar's strength was despite expectations of a not-so-hawkish monetary policy stance by Kevin Warsh who is expected to succeed Jerome Powell as Fed Chair.

During the week, the U.S. dollar inter alia rallied against the euro, the Australian dollar, the Japanese yen, the Swedish krona, and the Swiss franc. It however retreated against the British pound as well as the Canadian Dollar. The 6-currency Dollar Index added a little less than half a percent over the course of the week. Here is a quick recap of the dollar's trajectory during the week ended April 24.

The Dollar Index (DXY), a measure of the Dollar's strength against a basket of 6 currencies added 0.44 percent during the week ended April 24. The DXY which had closed at 98.10 on April 17 finished trading at 98.53 a week later. During the week, the index traded between the low of 98.01 recorded on Monday and the high of 98.94 recorded on Thursday. After rallying till Thursday, the dollar weakened on Friday amidst the Department of Justice dropping the probe against Fed Chair Jerome Powell.

Amidst the dollar's strength, the EUR/USD pair slipped 0.36 percent in a week. During the week ended April 24, the EUR/USD pair dropped to 1.1722, from 1.1764 a week earlier. The pair ranged between a weekly high of $1.1793 recorded on Tuesday and a weekly low of $1.1669, touched on Thursday.

The week ended April 24 however witnessed the pound rising 0.12 percent against the U.S. dollar. The sterling, which had closed at $1.3517 on April 17 rose to $1.3533 by April 24. The GBP/USD pair traded between a high of 1.3546 touched on Monday and a low of 1.3446, recorded on Thursday. Data released during the week had shown a less-than-expected level of unemployment rate and an inflation reading that matched expectations.

The Aussie also slipped against the U.S. Dollar during the week ended April 24. The decline of the AUD/USD pair during the week was around 0.24 percent, from 0.7168 on April 17, to 0.7151 on April 24. The pair traded between the week's high of 0.7187 recorded on Tuesday and the week's low of 0.7111 recorded on Thursday.

The Japanese yen also plunged 0.47 percent against the U.S. dollar during the week ended April 24. The USD/JPY pair which had closed at 158.64 on April 17, jumped to 159.38 in a week's time. During the week, the pair ranged between 158.55 touched on Monday and 159.86 recorded on both Thursday and Friday. Data released during the week had shown core inflation accelerating but remaining below the central bank's target.

Sentiment in the currency market remains tense ahead of the slew of central bank decisions to be announced during the week. In the Federal Reserve's interest rate decision due to be announced on Wednesday, markets overwhelmingly expect a hold. In this backdrop, the six-currency Dollar Index has traded between 98.55 and 98.21 on Monday. It is currently at 98.35, versus Friday's closing level of 98.53. The uncertain geopolitical situation in the Middle East as well as the stalled U.S.-Iran peace talks have also influenced the Dollar's decline against major currencies.

Ahead of interest rate decisions by the European Central Bank as well as the Bank of England, the euro and the pound have strengthened further. The EUR/USD pair has rallied 0.15 percent to 1.1739 from 1.1722 at close on Friday. The GBP/USD pair has also increased 0.11 percent to 1.3548 from 1.3533 at the end of the previous week. The AUD/USD pair which was at 0.7151 at close on Friday has jumped more than half a percent to 0.7190. The USD/JPY pair has however fallen to 159.25 from 159.38 at close on Friday ahead of Bank of Japan's interest rate decision on Tuesday.