The US dollar came out on the top in the global foreign exchange markets on Thursday and into Friday after it appeared that the saga involving the Iranian government appeared to be coming to a close.
The tensions in the Middle East had raged since last week, when the US military killed a senior Iranian army official.
At first, this caused significant harm to the US dollar – with many traders choosing to move their investments to safe haven currencies such as the Japanese yen.
However, the easing of tensions in recent days has led to traders moving back to the dollar in droves as the “safe haven” is no longer needed.
Over the course of the week, the greenback has managed to get stronger by 1.3% in its pair against the Japanese yen.
In the US dollar index, a tool which is used to measure how the currency is performing compared to several other currencies from around the world, the currency was up by just over half a percentage point.
While this was in part due to the much-anticipated easing of tensions, it was also due in part to the arrival of several positive economic data releases.
One such release suggested that the US service sector had shown a rise, while claims of joblessness – a weekly release which indicates how the labour market is performing – went down.
There was also a suggestion that the private sector was hiring at a higher rate than before.
Elsewhere around the world, the dollar clung to its new-found dominance.
It was firm in its pair against the single European currency, where it was seen at $1.1105 to the euro.
Against the British pound, it was seen at $1.3066.
The New Zealand dollar was also unable to tackle the US dollar’s success, with the latter resting close to its best performance in three weeks – at $0.6611.
One strong performer was the offshore Chinese yuan, which has risen to its best position in nearly half a year.
It was seen at 6.9261 in its pair against the US dollar.
Elsewhere in the Asia-Pacific region, the Australian dollar continued to receive a hammering.
The currency has gone down by 1.1% in comparison to the US dollar over the course of the week.
Many traders are now working on the assumption that the bushfires taking place in the country may have a profound impact on the economy and cause interest rates to go down.
It is now believed by the futures markets that there will be an interest rate cut of around 40% when the Reserve Bank of Australia next meets.
This meeting is scheduled to happen at the start of next month, and the new prediction reflects a rise in the chances.
The Australian dollar was seen at $0.6850 on Friday, which marked its lowest point in almost a month.
However, there was some hope for the currency after it was announced that retail sales figures this year looked set to be higher than analysts had previously forecast.