DXY Climbs to April 2025 High Amid Geopolitical Tensions
The US Dollar Index (DXY) is holding onto its gains near 102.30 on Monday, reaching its highest level since April 2025 amid persistent geopolitical risks. The index surged after a disappointing US jobs report last Friday, which showed only 29K new jobs added in September and an unexpected rise in the unemployment rate to 4.2%. Despite receding bets for a Fed rate hike in October and retreating US bond yields, the DXY has found strong support.
Traders are now focusing on the US ISM Services PMI data and Fed speeches for short-term trading opportunities. The DXY is currently up around 0.35% for the day, reflecting strong bullish momentum. The combination of geopolitical uncertainties, including conflicts in the Middle East and the Russia-Ukraine war, continues to boost the safe-haven dollar. Iran’s Foreign Minister, Abbas Araghchi, stated that there is no military solution to the conflict with the US, while Iranian parliament speaker Mohammad Bagher Ghalibaf announced the Strait of Hormuz will remain closed until conditions are met.
Meanwhile, military operations are underway in Yemen to retake territory held by the Houthis, and Ukraine reported deadly Russian air strikes over the weekend. These developments suggest that the DXY’s upward trajectory is likely to continue. However, bulls may wait for the FOMC meeting minutes on Wednesday for more clarity on future policy before making new bets. Technical analysis indicates that the DXY’s breakout above the 101.60-101.70 resistance level has triggered further buying, though the Relative Strength Index (14) is in overbought territory, suggesting potential for a corrective pullback.