Dollar Rises as Iran Talks Spark Safe-Haven Appeal
The dollar is poised to end the week on a high note due to uncertainty surrounding a potential Iran peace deal, which has boosted its safe-haven appeal. The greenback remains on track for a weekly gain against major peers despite being little changed on Friday ahead of the U.S. monthly payrolls report.
Markets are closely watching the payrolls report, which could provide fresh clues on the Federal Reserve's policy path and the possibility of another interest rate hike. A Reuters survey of economists predicts an increase of 80,000 in nonfarm payrolls last month, following a rise of 57,000 in June.
While some analysts expect a 'modest' dollar selloff if the report comes in softer than expected, others believe that any rate hike would have a limited impact on the currency's performance. Kristina Clifton, an economist at Commonwealth Bank of Australia, pointed out that the USD was supported by higher oil prices following news that a deal between the U.S. and Iran to reopen the Strait of Hormuz is further away than hoped.
The dollar index, which measures the currency against a basket of six major peers, including the euro, yen, and sterling, has been on an upward trend this week, rising just over 0.1% for the week.