US Dollar Hits Seven-Week Lows as Jobs Report Triggers Hawkish Tone

The US Dollar (USD) has been under pressure due to rising optimism over a potential US-Iran peace agreement, which could reopen the Strait of Hormuz and ease geopolitical tensions.

However, the recent jobs report showed an unexpected loss of 23K jobs in July, which reduced expectations for extra tightening by the Federal Reserve (Fed) and caused the USD to retreat to seven-week lows at around 99.40 on Friday.

Fed officials maintain a hawkish tone, signaling that interest rates may need to rise again if inflation persists.

The US Dollar Index (DXY) has been volatile, influenced by factors such as Japan's joint FX intervention and the Fed's monetary policy stance.