Dollar News (USD)

Analysts at Bank of America Securities keep a bearish stance on the dollar and forecast the euro to reach $1.17 by the end of the year. Still, in the short term, geopolitical tensions create risks for the European currency as well, they believe.

According to Investing.com, oil prices surged following escalating tensions in the Middle East, causing investor concern about a potential spike in US inflation. However, according to experts at Morgan Stanley, the impact of these events will be "minor."

After the US Federal Reserve (Fed) kept borrowing costs unchanged last week, central bankers have been split on the further pace of rate cuts.

According to Mary Daly, President of the Federal Reserve Bank of San Francisco, an interest rate cut by the Federal Reserve (Fed) in the fall is the most optimal scenario. She also viewed recent inflation figures in the country positively, but urged continued vigilance.

Investors are bracing for a sharp decline in stock markets on Monday, as US measures against Iran could lead to retaliation. The situation in the Middle East has become a key influencing factor for markets, overshadowing the US economic data set to be released this week, Reuters reports.

The dollar edged higher on Monday as anxious investors sought safe-haven assets. Traders are awaiting Iran's response to US involvement in the Middle East conflict. The greenback strengthened against a basket of major currencies. The dollar index rose 0.12% and reached 99.008.

US President Donald Trump calls for a 2.5-percentage-point cut in the Federal Reserve’s (Fed) rates to boost GDP growth. Such a reduction would be unprecedented, as the American central bank tends to adjust borrowing costs by a quarter point.

According to a recent forecast by HSBC, the US Federal Reserve (Fed) will lower rates by 25 basis points three times through March 2026. Analysts project cuts in September and December this year, followed by another one in March next year.

Euro-based stablecoins could rival their dollar counterparts by 2028, according to Fiorenzo Manganiello, founder and managing partner of LIAN Group.

According to JPMorgan economists, the threat of escalating tensions in the Middle East is now the main risk for the economy of both the US and the world. James Knightley, chief international economist at ING, shares this view.