Dollar Surges Amid Economic Optimism and Geopolitical Tensions

The dollar is set for its largest weekly rise since October, influenced by strong economic data and a hawkish Federal Reserve outlook. Rising tensions between the U.S. and Iran further boosted the greenback as investors seek safe-haven assets amid geopolitical risks.

The dollar maintained its upward trajectory on Friday, positioned for its most significant weekly increase since October. This rise is largely attributed to robust economic indicators and a more aggressive stance from the Federal Reserve, alongside escalating U.S.-Iran tensions.

Investor sentiment towards the dollar remains strong amid geopolitical uncertainty. President Trump's ultimatum to Iran concerning its nuclear ambitions has fueled market anxiety, encouraging a shift towards the dollar as a safer investment. Concurrently, the fear of potential conflict has left currencies such as the euro, yen, and pound vulnerable.

Market focus is shifting to U.S. economic indicators set to release, with core PCE and GDP figures looming. Investors expect potential Federal Reserve rate adjustments this year, with debates persisting over economic strategies to balance inflation and labor market support.

(With inputs from agencies.)