Eleonex: Geopolitical turmoil and high oil prices will continue to support safe-haven demand for the US dollar

⑴ Eleonex CEO Stefan Arsenovic pointed out that the renewed escalation of conflict in the Middle East is pushing up oil prices, and the fragile, uncertain geopolitical backdrop should continue to support demand for the US dollar as a safe haven asset.⑵ The ongoing tense situation in the Middle East is also increasing inflation concerns, further strengthening the logic for the Federal Reserve to raise interest rates and providing fundamental medium-term support for the US dollar.⑶ On Monday, the US dollar weakened amid light trading as a public holiday in the United States led to thin market liquidity. The stronger yen exerted short-term pressure on the dollar, but the impact of rising oil prices has not yet been fully reflected in exchange rates.⑷ Key inputs for the US dollar's direction this week will come from Thursday's Producer Price Index and Friday's Consumer Price Index. If inflation data exceeds expectations, it could rekindle rate hike expectations and push the dollar higher.