FX.co ★ Dollar Set for Weekly Gain

The dollar index stabilized around 99.4 on Friday and remained on course for a weekly gain, as persistent uncertainty in the Middle East continued to underpin safe-haven demand for the US currency. President Donald Trump said peace negotiations were entering their final phase and was reportedly reluctant to return to full-scale confrontation with Iran despite recent hostilities. Still, Iranian Deputy Foreign Minister Abbas Araghchi stated that the talks had produced no meaningful progress, while Iran-backed Hezbollah rejected a US-brokered ceasefire proposal between Israel and Lebanon. In the US, investors shifted their focus to the May employment report for fresh insight into labor market conditions and the Federal Reserve’s policy outlook. Recent labor data signaled ongoing resilience in the economy, bolstering expectations that the Fed could raise interest rates before year-end as officials respond to an energy-driven inflation shock linked to the Middle East conflict.