Dollar Gains Strength as Trump Rejects Iran's Peace Proposal

Dollar Gains Against Peers Amid US Jobs Data and Iran Tensions

The US dollar advanced against its major peers in early Asia trade on Monday, supported by strong US jobs data released late last week and as the US-Iran ceasefire hung by a thread, boosting demand for the safe-haven currency. The euro was down 0.2% at $1.1767, the yen slipped 0.1% to 156.905 yen per dollar, and the British pound was 0.3% lower at $1.3597. The risk-sensitive Australian dollar slipped 0.2% to $0.7234, while its kiwi counterpart weakened 0.3% to $0.5948.

The dollar index, which measures the greenback's strength against a basket of six currencies, was trading at 98.001 in early Asia. This gain in the dollar index is largely due to the strong US jobs data released on Friday, which showed non-farm payrolls increased 115,000 in April, almost twice as fast as expected. This reinforces expectations that the Federal Reserve would keep interest rates unchanged for some time.

Oil prices jumped as trading resumed on Monday, with Brent crude up 3.3% at $104.65 a barrel, after President Donald Trump on Sunday rejected Iran's response to a US proposal for peace talks, dashing hopes for an imminent end to the 10-week-old conflict. Against the Chinese yuan, the US dollar was flat at 6.7951 yuan in offshore trade after data released at the weekend showed China's export growth accelerated in April.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

In related news, Trump and Chinese President Xi Jinping are set to discuss Iran, Taiwan, artificial intelligence, nuclear weapons, and critical minerals when they meet later this week, according to US officials. The US data remains resilient, and the labor market appears to have stabilized across a number of data sets.