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The US Dollar extended its correction against major currencies on Friday, July 10, as heightened tensions between the US and Iran kept markets on edge. The dollar index fell to 96.50, pressured by concerns over potential military escalation and its impact on global risk appetite. Safe-haven assets like gold and the Japanese yen gained traction amid the geopolitical uncertainty, while oil prices dipped slightly due to fears of disrupted Middle East supply routes.
The ongoing US-Iran standoff is critical for traders as it influences both risk-on and risk-off dynamics. A potential escalation could trigger a flight to safety, boosting the yen and gold, while a de-escalation might revive risk appetite, benefiting equities and emerging market currencies. Additionally, the Federal Reserve’s policy outlook remains a key factor, with markets closely watching for any shifts in monetary stance amid the volatile backdrop.
Looking ahead, investors should monitor developments in the US-Iran conflict, including diplomatic statements and military movements, for immediate market reactions. Broader economic data, such as US non-farm payrolls and inflation reports, will also shape the dollar’s medium-term trajectory. Traders are advised to maintain a balanced approach, hedging against geopolitical risks while staying attuned to central bank signals.
