Dollar Climbs Amid Global Economic Shifts and Geopolitical Tensions

The U.S. dollar reached a six-week high against the yen as strong job market data pointed to steady U.S. interest rates. Following geopolitical tensions and economic outlooks in Japan and Europe, global currency markets experienced fluctuations. Analysts predict the Federal Reserve may slow its rate-cutting pace.

The dollar soared to a six-week high against the yen on Thursday, driven by strong U.S. employment data that reinforced expectations the Federal Reserve might pause its interest rate cuts. Japan's yen weakened following its new prime minister's comments that indicated no immediate plans for rate hikes.

The euro hovered near a recent low after European Central Bank official Isabel Schnabel adopted a dovish stance on inflation. This pushed expectations for an imminent rate cut, while geopolitical tensions with Iran's Israel missile attack further increased safe-haven demand for the dollar.

The dollar index saw gains, bolstered by a stronger-than-expected rise in U.S. private payrolls. Analysts suggest that if upcoming non-farm payroll figures remain solid, the likelihood of substantial rate cuts will diminish, shaping the U.S. economic outlook amid current tensions.

(With inputs from agencies.)