Dollar surges to 13-month high as Fed hawkishness and Middle East tensions drive safe-haven demand

Dollar surges to 13-month high as Fed hawkishness and Middle East tensions drive safe-haven demand
15 articles·8 sources·updated 13 days ago·View in graph

Story Timeline

2 months · 17 summary articles

  1. London stocks mixed as UK inflation cools sterling and boosts Fed cut bets

  2. Eurozone consumers' inflation expectations dip as ECB data released

  3. Investors cut long-term inflation bets as Fed hawkishness and oil drop reshape markets

  4. Global stock sell-off deepens: 400bn SpaceX value wiped out as gold hits two-week low

  5. Fed's dot plot omission sparks volatility as Kurshutov urges Ukraine investment

  6. Dollar surges to 13-month high as Fed hawkishness and Middle East tensions drive safe-haven demand

  7. Dollar hits 13-month high as Fed signals hikes amid Middle East turmoil

    Continuation
  8. Ibex 35 hits record highs as Santander briefly overtakes Inditex

  9. Global markets split as Iran deal slashes oil prices, Fed rate hike looms

  10. Global oil prices plunge as US-Iran deal eases tensions and fuels market rebound

  11. Global markets surge as US-Iran peace deal slashes oil prices

  12. Asian stocks surge to multi-month highs on US-Iran dtente and SpaceX IPO

  13. Fed under Kevin Warsh defies Trump, holds rates and signals hawkish shift

    revised 2×
  14. War escalation in Middle East fuels inflation, forces Poland to lift fuel price caps

  15. Global markets mixed as US inflation rises and Micron shares surge

    revised 2×
  16. Iran peace deal stumbles: European stocks slip as energy crisis lingers

    revised 2×
  17. Trump orders major NATO drawdown in Europe amid rising Mideast tensions

    revised 3×
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The US dollar surged to a 13-month high on Friday as the Federal Reserve’s hawkish signals and escalating Middle East tensions drove investors toward safe-haven assets. The ICE dollar index climbed to its strongest level since May 2025, with money markets pricing in a likely rate hike amid renewed uncertainty over peace efforts in the region. Reports that Israel targeted Lebanon and Iran withdrew from negotiations further intensified the flight to safety, amplifying the dollar’s gains .

The Fed’s hawkish stance, which has dominated market sentiment since Thursday, continued to underpin the dollar’s strength. Analysts noted that the central bank’s signals of further rate hikes—combined with geopolitical instability—have created a potent mix for currency traders seeking stability. Gold, typically a hedge against uncertainty, sank as the dollar’s rally gained momentum .

In parallel, Türkiyes external assets rose to $406 billion in April, driven by a substantial increase in reserve holdings, according to the Turkish Central Bank. The nation’s total liabilities expanded, however, leaving its net international investment position at a deficit of $402.3 billion .

Meanwhile, Russia’s central bank warned of faster inflation risks, citing fuel shortages and the economic strain of the war. The regulator signaled caution in monetary easing, defying expectations of sharper rate cuts as inflationary pressures mount .

Asian markets echoed Wall Street’s rise, with investors betting on the Fed’s hawkish trajectory. The Nikkei 225 in Tokyo surpassed 70,000 points for the first time, gaining nearly 8% in a week—a surge analysts attributed to optimism around artificial intelligence-driven equities .

Elsewhere, Bangladesh intensified efforts to recover $230 billion in missing assets, engaging in negotiations with the UK, US, UAE, and Singapore to claw back funds lost to financial mismanagement or corruption .

The dollar’s rally, now in its second consecutive session, shows no signs of abating as investors weigh the Fed’s resolve against a backdrop of geopolitical and economic uncertainty.

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