The recent bullish breakout of the dollar was driven by a stronger-than-expected US CPI report for March, raising doubts about inflation slowing towards the Fed's target. This has led to a delay in rate cut expectations from the Fed, with the first cut now anticipated in July or September.
In this video, Lee Hardman, Currency Analyst at MUFG, explores how geopolitical risks, such as the escalating conflict between Israel and Iran, could increase safe-haven demand for the dollar. Lee also explores how other factors like potential Japanese intervention to support the yen and signs of global growth picking up outside the US could restrain further dollar upside.