The news of violence erupting in the Middle East has roiled markets and despite the U.S. dollar’s haven status in times of trouble, the euro and British pound are (still) holding quite well against the greenback at the opening of this new week. The dollar even showed a reluctance to a further rally after Friday’s solid jobs report that saw 336k new jobs in September.
Following the shock of the Hamas attack in Israel over the weekend, the dollar opened only with a small upside gap.
However, the instability in the Middle East has the potential to reignite the greenback’s rally and may brings back the discussion about whether the euro may once again fall to parity.
Bob Savage, head of markets strategy at insights at BNY Mellon Capital Markets wrote in a note: The “dollar bid holds and the confusion over growth and inflation continues. We are more likely to see an escalation of conflict than a resolution both at home and abroad, in markets and in economics, in monetary and fiscal policy.”
Today is a holiday in the U.S. which may contribute to slipperier market conditions than usual on these days with less liquidity.
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