Dollar Rises as Trump Calls Iran Peace Proposal 'Unacceptable', Markets React
Market Movements and Geopolitical Tensions Impact Currency and Commodity Prices
By Gregor Stuart Hunter
Dollar Strengthens Amid Global Uncertainty
SINGAPORE, May 11 (Reuters) - The dollar advanced against its major peers in early Asia trade on Monday, supported by strong U.S. jobs data released late last week and as the U.S.-Iran ceasefire hung by a thread, boosting demand for the safe-haven currency.
Major Currency Movements
The euro was down 0.2% at $1.1767, the yen slipped 0.1% to 156.905 yen per dollar and the British pound was 0.3% lower at $1.3597. The risk-sensitive Australian dollar slipped 0.2% to $0.7234, while its kiwi counterpart weakened 0.3% to $0.5948.
"We start the new trading week, as has so often been the case of late, reacting to geopolitical headlines," said Chris Weston, head of research at Pepperstone Group Ltd in Melbourne.
Oil Prices Surge After Trump Rejects Iran Proposal
Oil prices jumped as trading resumed on Monday, with Brent crude up 3.3% at $104.65 a barrel, after President Donald Trump on Sunday rejected Iran's response to a U.S. proposal for peace talks, dashing hopes for an imminent end to the 10-week-old conflict.
Trump's Statement
"I don’t like it — TOTALLY UNACCEPTABLE," Trump wrote on Truth Social, without giving further detail.
China's Export Data and Yuan Stability
Against the Chinese yuan, the U.S. dollar was flat at 6.7951 yuan in offshore trade after data released at the weekend showed China's export growth accelerated in April. Exports increased 14.1% from a year earlier in dollar terms, outpacing the 2.5% gain in March and a 7.9% rise tipped by economists as factories raced to meet AI-related demand.
U.S. Economic Data and Federal Reserve Outlook
The dollar index, which measures the greenback's strength against a basket of six currencies, was trading at 98.001 in early Asia. The greenback has found support from the U.S. jobs report released Friday that showed non-farm payrolls increased 115,000 in April, almost twice as fast as expected. Those figures reinforced expectations the Federal Reserve would keep interest rates unchanged for some time.
Market Analysis
"The dollar remained on the back foot last week, with the market laser-focused on prospects for a gradual reopening of the Strait of Hormuz, with the breakthrough potentially coinciding with the Trump-Xi meeting," strategists from Barclays wrote in a research report.
Labor Market Stability
"That said, U.S. data remains resilient and the labour market appears to have stabilised across a number of data sets," they added.
Upcoming Trump-Xi Meeting
Trump and Chinese President Xi Jinping are set to discuss Iran, Taiwan, artificial intelligence, nuclear weapons and critical minerals when they meet later this week, according to U.S. officials.
(Reporting by Gregor Stuart Hunter; Editing by Sam Holmes)
