Global Currency Shifts Amid Geopolitical Tensions

On Friday, the dollar marked its first monthly increase since October, fueled by ongoing geopolitical tensions, while the yuan's momentum waned following China's intervention in its ongoing rally. Meanwhile, the Australian dollar was poised for its fourth consecutive monthly rise, driven by expectations for upcoming interest rate hikes by the central bank amid robust economic performance.

Geopolitical dynamics intensified with Pakistan targeting Taliban sites in Afghan cities and U.S.-Iran nuclear negotiations showing slight progress yet lacking a breakthrough. Global market moods remained fragile amidst investor considerations of AI's potential economic disruptions, favoring safe havens like gold and the dollar.

The dollar strengthened by approximately 0.6% this month, with the Federal Reserve hinting at potential rate hikes if inflation persists. The People's Bank of China slowed the yuan’s rally, leading to a 0.2% decline, though it has seen a 2% increase this year. Other currencies exhibited varied performances amid the volatile global landscape.