US Dollar stabilizes despite risk-aversion trends

The US dollar has remained stable despite a recent return to risk-aversion trends. While geopolitical tensions involving Iran and attacks on Saudi Arabian oil facilities pushed Brent crude to five-month highs, the dollar index recorded its second consecutive weekly decline. This trend persists despite higher inflation, strong economic activity, and increased demand for safe-haven US Treasury bonds.

Market analysts suggest speculators are reducing large long positions on the dollar, indicating the currency may have reached a short-term peak. The upcoming week is expected to be highly volatile, featuring meetings from the Federal Reserve and the European Central Bank, as well as GDP estimates for the US and Eurozone. Additionally, earnings reports from Microsoft and Alphabet are anticipated to influence currency markets, particularly given the current market focus on Artificial Intelligence.