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MUFG analyst Lee Hardman highlights a sharp rebound in the US Dollar driven by Operation 'Epic Fury,' which has triggered a new energy price shock. The move has pushed the Dollar Index back toward the 96.000–100.00 range, reflecting renewed strength amid concerns over energy market volatility. The operation, involving military actions in key energy-producing regions, has disrupted supply chains and fueled fears of higher energy costs, traditionally a bullish factor for the Dollar. This development is critical for global markets as energy prices directly impact inflation and central bank policies. A stronger Dollar often pressures emerging markets and commodities priced in USD, such as gold and oil. Traders should monitor how central banks, particularly the Federal Reserve, respond to inflationary pressures from energy shocks. The Dollar's performance against major currencies like the Euro and Yen will also be a key focus. For Gulf investors, the energy-driven Dollar rebound underscores the interconnectedness of regional economies with global energy markets. Rising energy prices could benefit oil-exporting nations but may also increase import costs for energy-dependent economies. Key indicators to watch include OPEC+ production decisions, Fed rate expectations, and geopolitical developments in energy-rich regions.
