The US dollar weakened on Friday, with the dollar index falling below the 98 level and reaching its lowest point in ten weeks.
The decline came even after fresh labor market data showed stronger-than-expected hiring activity in the United States, reinforcing views that the economy remains relatively resilient despite ongoing geopolitical tensions and elevated energy prices.
US nonfarm payrolls increased by 115,000 jobs in April, significantly above market expectations for a gain of 62,000 jobs. The report also marked the second consecutive month of payroll growth for the first time in nearly a year.
Meanwhile, the unemployment rate remained unchanged at 4.3%.
Despite the stronger employment figures, currency markets continued focusing on the broader economic risks tied to the Iran conflict and persistent inflation pressures.

Markets Balance Economic Strength Against Inflation Risks

Investors are now weighing strong economic data against expectations that the Federal Reserve will likely maintain a cautious stance on interest rates.
The ongoing conflict involving Iran has triggered a major energy shock after severe disruptions in the Strait of Hormuz sharply reduced global oil and natural gas flows.
Higher energy prices have fueled concerns that inflation could remain elevated for longer, complicating the Fed’s policy outlook.
While resilient labor market conditions typically support the dollar, traders increasingly believe policymakers may avoid aggressive tightening if geopolitical instability continues threatening global growth.
The combination of slowing investor confidence and uncertainty surrounding the Middle East conflict has pressured the US currency in recent weeks.

Hormuz Crisis Remains a Major Market Focus

The Strait of Hormuz remains at the center of global market concerns as shipping disruptions continue across the key energy corridor.
The waterway has remained largely restricted since the war began earlier this year, contributing to soaring oil prices and supply shortages across international energy markets.
President Donald Trump said the month-long ceasefire with Iran remained in effect despite renewed clashes involving US and Iranian forces.
However, uncertainty remains high as Tehran has yet to formally respond to Washington’s proposal aimed at reopening the critical shipping route.
Investors continue monitoring developments closely, as any escalation in the region could further disrupt energy supplies and increase volatility across global financial markets.

Dollar Remains Under Pressure

The US Dollar Index (DXY) fell to 97.84, down 0.23% from the previous trading session.
Over the past month, the dollar has weakened nearly 1%, while declining roughly 2.5% over the past year.
Historically, the US dollar reached an all-time high of 164.72 in February 1985.
Currency markets are expected to remain highly sensitive to further economic data, Federal Reserve commentary, and developments involving Iran and the Strait of Hormuz in the weeks ahead.