The dollar edged lower on Monday but remained near a one-week high with fragile sentiment against a backdrop of conflict in the Middle East supporting demand for the safe-haven currency.
Israel’s bombardment of Hamas-ruled Gaza continued overnight, with residents saying it was the heaviest pounding yet in nine days of conflict. The dollar index eased 0.08% to 106.47, but held close to highs touched on Friday, with investors also waiting to hear a speech by Federal Reserve Chair Jerome Powell later this week for clues on the U.S. interest rate outlook. “The conflict between Israel and Hamas continues and is providing volatility to the financial markets with the traditional safe-haven flows. This has to be held against the theme of higher-for-longer regarding global monetary policy,” said Jens Peter Sørensen, Chief Analyst at Danske Bank.