On Monday, the dollar is mixed due to geopolitical turmoil in the Middle East and expectations of continued high interest rates from the Federal Reserve (Fed).
The US Dollar Index (DXY), which tracks the greenback against a basket of global currencies, fell 0.1% to 105.90.
On April 13, Iran launched a massive drone and missile attack on Israel in response to its alleged attack on the Iranian consulate in Syria. Following Saturday night's rocket and drone attacks on northern Israel, the IDF struck a major Hezbollah weapons production facility in Lebanon. At the same time, Israeli media reported that Tel Aviv was preparing a serious response to Iran's unprecedented attack. However, the US urged the Israeli authorities not to respond to the massive Iranian attack, since the destruction of 99% of Iranian drones and missiles is already a major victory for Israel.
Also, high US inflation and strong macroeconomic indicators are prompting the Fed to reconsider its plans to ease monetary policy, FX Street reported.
CME's FedWatch data showed that markets are now pricing in a 63.5% probability that the Federal Reserve will leave interest rates unchanged at its June meeting, up from 46.8% the previous week.
The dollar gained 1.6% against six of its major counterparts last week.
EUR/USD rose 0.16% to 1.0660 amid a growing divergence between the monetary policies of the European Central Bank (ECB) and the Federal Reserve.
GBP/USD also rose 0.16% to 1.2471 amid hawkish sentiment surrounding the Fed.
Meanwhile, USD/JPY jumped 0.41% to 153.91 as the yen remains under pressure due to the Bank of Japan's uncertain outlook for future rate hikes. Japanese government officials continue to actively defend the national currency. Earlier, Japan's Finance Minister, Shun'ichi Suzuki, said that the Bank of Japan is closely monitoring the yen's movement and that the government is ready to take measures to stabilize the yen at any time.
The AUD/USD and NZD/USD rose 0.32% and 0.03% to 0.6484 and 0.5938, respectively. The Australian dollar strengthened amid escalating geopolitical tensions in the Middle East, while the New Zealand dollar's gains were limited by weak New Zealand services sector data.
The USD/CNY was up 0.02% at 7.238.
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