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The dollar rebounded as the situation in Iran escalated, and the market awaited U.S. non-farm payroll data.
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Platform]: The U.S. dollar rebounded due to the escalation of the situation in Iran, and the market is waiting for the U.S. non-agricultural data." Hope this helps you! The original content is as follows:
In Asian trading on Friday, the U.S. dollar index consolidated at the 100 mark. The U.S. dollar index rebounded sharply after falling for two consecutive days on Thursday, with the U.S. dollar index rising 0.46% to 100.02. Affected by renewed concerns about the conflict in the Middle East, President Trump vowed to launch a more violent attack on Iran in the next two to three weeks, without giving a timetable for reopening the Strait of Hormuz or ending the war. The Iranian military immediately warned that it would launch a more violent attack. The market's expectations for a quick end to the conflict were shattered, and the demand for safe havens heated up again.
Analysis of major currency trends
US dollar: As of press time, the US dollar index is hovering near the 100 mark. The immediate catalyst is the US non-farm payrolls report on Friday, which will be released at 12:30 GMT. The market consensus is that about 57K new jobs will be added, a rebound from -92K in February, and the strong number of initial jobless claims of 202K on Thursday suggests that risks are tilted to the upside. U.S. stocks were closed for Good Friday, leaving all U.S. dollar currency pairs, including GBP/USD, with thinner than usual liquidity. Strong non-farm payrolls data could push the dollar higher.


Foreign exchange market news summary
1. The U.S. military’s bombing of a bridge in Iran may be followed by more attacks on infrastructure
According to Axios reports, the U.S. military launched its first attack on Iran’s major civilian infrastructure on Thursday local time, just hours after Trump threatened to bomb Iran “back to the Stone Age.” The attack on the B-1 Bridge in Karaj near Tehran showed that the US military is expanding its target range and may be just the beginning of attacks on energy, water and transportation infrastructure. A U.S. Defense Department official said more bridges may be struck. The bridge was attacked because it is used by Iran's armed forces to secretly transport missiles and missile xmmarkets.cnponents from Tehran to launch sites in western Iran. Missile xmmarkets.cnponents are shipped across bridges in large boxes and containers and assembled at the launch site. According to the official, the bridge is also used to provide logistical support to Iranian military forces in Tehran.
2. The IMF released its 2026 U.S. Economic Assessment: Growth is expected to rise to 2.4%, warning that energy price uncertainty may put pressure on inflation
On April 2, the International Monetary Fund (IMF) released the U.S. Article IV Consultation Report for 2026. The report pointed out that as the impact of tariffs gradually fades and global oil prices fall, U.S. core PCE inflation is expected to return to the 2% policy target in the first half of 2027. The IMF predicts that U.S. GDP growth will accelerate slightly to 2.4% in 2026. However, the IMF also pointed out that the public debt-to-GDP ratio has risen to 123.9%, and the current account deficit is still huge. At the same time, uncertainty about energy prices may put inflation again under pressure.
3. The Iranian speaker suggested that Wall Street controls Washington’s war policy and initiated a vote to announce the list
IranQalibaf, the speaker of the House of Representatives, posted on social platforms claiming to have tracked the flow of funds, accusing a small group of bankers and hedge fund managers of secretly meeting last week and deciding to kidnap Washington's Iran war policy, and then launched an operation. Qalibaf initiated a poll asking whether he should "name names," with options including "yes", "no" and "Ackerman: Did you lose the invitation?" (Ackman is a wealthy Jewish American businessman and hedge fund manager). Among the nearly 16,000 votes cast, 70% of netizens voted for the "yes" option. This is the first time that Iran has pointed its finger at Wall Street financial capital, accusing it of manipulating U.S. policy on the war against Iraq. Qalibaf hinted that he would announce the relevant list, but has not yet disclosed specific evidence.
4. The Federal Reserve Voting xmmarkets.cnmittee warned: The oil price shock is unlucky and will significantly push up inflation expectations
This year's FOMC voting xmmarkets.cnmittee and Chicago Fed President Goolsby said on Thursday local time that the economy is suffering from the impact of oil prices. When the inflation caused by last year's tariff impact has not subsided, the oil price shock has pushed up prices. This "inopportune timing" worries him. Goolsby said: "When gasoline prices rise significantly in the short term, people's expectations for the trajectory of inflation over the next 12 months start to rise significantly, and that may put us in a more difficult situation." The sharp rise in oil prices since the outbreak of the Iran war has also increased business uncertainty and slowed the pace of hiring.
5. Fed Williams: Inflation and employment risks have tended to be balanced, and he is inclined to stay on hold
New York Fed President Williams said that the inflation and employment risks brought about by rising energy prices have become "balanced," and he is inclined to support keeping interest rates unchanged. "Monetary policy, through the actions we took last year and the current stance, is actually well positioned to balance those risks, which is what we need to do," Williams said. Williams also said he did not believe losses in private credit, the non-bank lending sector, pose systemic risks, although there have been calls for early redemptions from some investors in the sector. Williams said this was primarily due to repricing of underlying loans. "I don't think it poses a systemic risk to our financial system at this time," he said, noting that policymakers are "paying close attention" to banks' risk exposures. When asked whether some private credit funds might be considered "too big to fail," he replied: "Absolutely not."
Institutional Views
1. ANZ: Shrinking demand may be the "only solution" to market balance
ANZ analysts pointed out that if supply disruptions in the natural gas market related to the Middle East war continue into the summer, the rebalancing of the market may be achieved by cutting demand rather than increasing supply. Analysts Daniel Hynes and Soni Kumari said: "This is an unpleasant but effective 'mitigation' lever: including industrial production reductions, fuel substitution where possible, and demand-side response in the power market." At present, demand substitution has begun, and natural gas-intensive usersis moving toward more coal power. Analysts noted that Japan has said it will expand the use of such power plants, while Germany is considering reactivating mothballed coal power plants to curb high electricity prices.
2. Economist: Whether the yen exchange rate can "turn around" depends on the xmmarkets.cnmunication logic between the government and the central bank
Economist Hideo Kumano said that the relationship between the Bank of Japan and Prime Minister Sanae Takaichi will determine whether the next interest rate hike can successfully boost the yen. Kumano pointed out: "If the Takaichi City Government criticizes the Bank of Japan's interest rate hike, the motivation to reverse the yen's depreciation trend will be weakened." Although Takaichi Sanae is considered to be leaning towards loose monetary policy, dealing with the rising cost of living is one of the most important issues for his government. As energy prices soar, the task is becoming increasingly xmmarkets.cnplex. Currently, pricing in the overnight index swap market shows that the probability of the Bank of Japan raising interest rates in April is 70%.
3. Analyst: A stronger US dollar will restrict the mid-term gains of crude oil
XS.com analyst Rania Gule pointed out in a report that crude oil prices can easily exceed US$110 per barrel again in the short term. She said traders were building positions in anticipation of further supply disruptions following Trump's recent xmmarkets.cnments. At present, the market has not fully digested the risk of a xmmarkets.cnprehensive escalation of the situation in the Middle East, so the upward risk is greater than the downward risk in the short term. Analysts, however, have a more balanced outlook for the medium term, as renewed expectations for a rate hike by the Federal Reserve could strengthen the dollar, putting pressure on xmmarkets.cnmodities such as oil, which are priced in dollars. She added that the medium-term outlook for crude oil still depends on the global economy's ability to absorb the impact of higher interest rates.
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