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The US dollar saw a recovery against major currencies this week amid heightened Middle East tensions and anticipation of key economic data. The focus shifts to the upcoming Nonfarm Payrolls (NFP) report and the Reserve Bank of Australia's (RBA) interest rate decision, which could influence USD/AUD and USD/CAD cross pairs. Central banks in Canada, Switzerland, and New Zealand will also release employment and inflation data, adding to the week's volatility. The Federal Reserve's recent hawkish stance has kept the dollar supported, while geopolitical risks in the Middle East have pushed investors toward safe-haven assets.
For traders, the NFP data is critical as it often drives short-term USD momentum. A stronger-than-expected report could reinforce the Fed's rate hike narrative, boosting the dollar. Conversely, weak data might pressure the greenback ahead of the Federal Open Market Committee (FOMC) meeting. The RBA's decision on rate hikes will test AUD/USD levels, particularly if the central bank signals a pause in tightening. Broader market sentiment will also be shaped by oil prices and Middle East developments, which impact commodity currencies like the Canadian and Australian dollars.
MENA investors should monitor how global risk appetite shifts affect Gulf equity markets and USD liquidity. The interplay between central bank policies and geopolitical risks will likely keep volatility elevated. Key watchpoints include the NFP figure on Friday, RBA's policy statement, and OPEC+ meetings for oil price guidance. Traders may use these events to assess carry trade opportunities or hedge against currency swings.
