Dollar index lifted on safe haven demand; struggle near 3-year low stays

The dollar index rebounded amid safe haven demand on Friday although it continues to struggle around a three year low. Investors were led to dollar for respite amid heightened geo-political tensions in Middle East after media reported that Israel has launched unprecedented attack on Iran, targeting the heart of nations nuclear program and senior military leaders. The move plunges the Middle East into fresh uncertainty with the real risk of a wider regional war now breaking out. However, growing uncertainty over US trade policy after President Donald Trump threatened to impose unilateral tariffs and increasing bets of Federal rate cut following softer inflation data from US continues to add pressure on the counter. The dollar index that measures the greenback against a basket of currencies is quoting at 97.86, up 0.42% on the day. Among basket currencies, EURUSD and GBPUSD are both trading lower by 0.4% at $1.1597 and $1.3547 respectively. Investors now await the University of Michigans consumer sentiment report for June due for release later today.

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