Middle East tensions fuel safe-haven rush
The ongoing conflict between Israel and Palestine has taken centre stage, with a focus on the recent Hamas attacks and the Israeli military's retaliatory actions.
Meanwhile, financial markets remain fixated on economic data and central bank decisions. Following our previous episode, most currencies rebounded against the dollar, thanks in part to a dovish tone from several Fed policymakers that tempered expectations of more US rate hikes.
However, the dollar has shown broad strength in the past week, partly due to stronger US inflation figures. The euro is hovering just above 10-month lows, reflecting concerns about the state of the Eurozone economy. The British pound is also struggling, with a soft UK GDP report and vague comments from Bank of England members providing little clarity on UK interest rates.
Among the G10 currencies, safe-havens like the US dollar and Swiss franc have been the best performers in the past week.
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