Oil prices remain highly volatile, having surged by approximately 13% since Friday amid growing doubts over whether President Trump’s latest peace initiative will progress as intended.
Cross-border strikes between Israel and Lebanon have intensified over the past 24 hours, while Israeli Prime Minister Benjamin Netanyahu has firmly rejected the proposed peace roadmap. These developments have added further uncertainty to an already fragile geopolitical backdrop and driven oil prices sharply higher.
Despite the rise in oil, the US dollar has failed to strengthen as it did during similar geopolitical shocks earlier in the year. This suggests that markets may be becoming more accustomed to continued instability in the Middle East, reducing some of the dollar’s traditional safe-haven demand.
Recent dollar weakness has also been compounded by softer US labour-market data, which points to growing challenges for American businesses and a slowdown in hiring.
Looking ahead, attention now turns to this afternoon’s US ADP employment release. The figures have followed a clear downward trend over the past five weeks, falling from 30,000 to 15,000, representing a 50% decline.
Following Friday’s disappointing Non-Farm Payrolls report, which fell into negative territory, another weaker employment reading today would not come as a major surprise. A softer-than-expected result could place further pressure on the US dollar, while a stronger figure may provide it with some short-term support.
CLICK HERE for more currency market news.
