The dollar is poised to close the week with solid gains, rising more than 1%, driven by resilient US macroeconomic data and escalating geopolitical tensions. The continued tensions in the Middle East have pushed energy prices higher, fueling fears of persistent global inflation and forcing investors to reassess the timeline for Federal Reserve monetary policy easing. Pricing has shifted toward just one cut this year rather than two.

Treasury yields have responded accordingly. The 10-year yield climbed to around 4.15%, its highest level in several weeks, reflecting both inflation concerns and stronger domestic fundamentals. Recent PMI readings pointed to continued expansion in economic activity, reinforcing the view that the US economy remains resilient.

Labor market indicators have also supported that narrative. Announced job cuts declined sharply compared with both the previous month and last year, while initial jobless claims remained stable.

Attention now turns to today’s Non-Farm Payrolls report. Markets expect roughly 59,000 new jobs, a notable slowdown from the previous month. A weaker reading could challenge the resilience narrative and weigh on yields and the dollar. However, ongoing geopolitical tensions and elevated energy prices may continue to anchor the currency’s bullish bias in the near term.