US Dollar Index advances after Trump and Iran dismissed latest peace initiatives

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is holding gains after modest losses the previous day, trading around 98.10 during Asian hours on Monday.

The Greenback strengthens amid growing risk aversion after US President Donald Trump and Iran dismissed each other’s latest peace initiatives aimed at ending the Middle East conflict. According to Bloomberg on Sunday, Trump turned down Iran’s latest peace proposal, describing it as “totally unacceptable.” Iranian state television reported that an Iranian official said Tehran’s response emphasized ending the conflict across all fronts, particularly in Lebanon, and addressing the security of shipping routes through the strait, though no details were provided on how or when the key waterway could reopen.

An extended Middle East conflict and the fragile ceasefire between the US and Iran may continue to support safe-haven demand for the Greenback, potentially weighing on the major currency pair in the near term.

US Bureau of Labor Statistics released data on Friday indicating that Nonfarm Payrolls (NFP) increased by 115K in April, down from March’s 185K reading but still exceeding the market forecast of 62K. At the same time, the Unemployment Rate remained unchanged at 4.3% in April, matching analysts’ expectations.