Dollar Holds Steady Amid Oil Price Declines and US-Iran Tensions
The US dollar remained relatively stable on Friday as oil prices experienced a slight decline of about -3%. This development, along with the 10-year T-note yield falling by -1.8 bp after reaching a new 1.5-year high earlier in the session, contributed to the dollar's steady performance.
The market is bracing for a possible expansion of US military attacks on Iran, which President Trump said he is considering. The dollar continues to receive safe-haven support due to these tensions, particularly after the Iran-backed Houthis launched a missile and drone attack on two Saudi Arabian oil tankers in the Red Sea on Thursday.
The attack has expanded the oil disruptions beyond the Strait of Hormuz and threatens oil shipments in the Red Sea. In response, President Trump stated that he will hold Iran responsible for the Houthi attacks and is considering a 'massive attack' that would be 'bigger than ever before,' which is 'close to making a decision on it.'