Dollar and other safe havens rise as Israel strikes Iran
- The U.S. dollar advanced on Friday after Israel said it had launched strikes on Iran , sparking a rush back into the currency and a rally in other safe-haven assets including the Japanese yen, the Swiss franc and gold.
Israel said early it had struck Iranian nuclear targets to block Tehran from developing atomic weapons, and Iranian media and witnesses reported explosions including at the country's main uranium enrichment facility. U.S. and Iranian officials were due to hold a sixth round of talks in Oman on Sunday on Tehran's escalating uranium enrichment program. Israel's ambassador to the United Nations said the government's determination to strike Iranian targets was an independent decision. "The geopolitical escalation adds another layer of uncertainty to already fragile sentiment," said Charu Chanana, chief investment strategist at Saxo. "If tensions rise, particularly with any threat to oil supply routes, the risk-off mood could persist, keeping upward pressure on crude and haven assets."The Japanese yen and the Swiss franc , both also traditional safe-haven currencies, rallied 0.3% and 0.4% respectively against the dollar. The dollar's biggest gains were against currencies positively correlated to risk sentiment, the Aussie dollar and the New Zealand dollar , which both weakened 0.9%. The euro reversed a four-day rally to trade down 0.3% at $1.155. Investors also snapped up U.S. Treasury bonds, sending the yield on the benchmark 10-year note down by about 4.7 basis points to a more than one-month low of 4.31%. Gold prices jumped 1.3% to their strongest since early May. Friday's developments created more uncertainty for investors who have been navigating a wide range of concerns around the outlook for global trade and inflation this week. Despite the day's gains, the dollar index was trading close to its lowest level since March 2022 that it hit earlier in the week, as a U.S.-China trade truce reached earlier in the week offered little clarity and U.S. President Donald Trump said he would outline unilateral terms of trade with other economies in the days to come. The dollar index is on track for a weekly decline of over 1%, its biggest drop in nearly a month, and is set to mark losses against the yen, the Swiss franc and the euro. "Geopolitical noise may temporarily distort the dollar downtrend and temporarily weigh on risk proxies especially heading into the weekend," said Christopher Wong, a currency strategist at OCBC. Two inflation reports showed price pressures were contained, fuelling expectations of more aggressive interest rate cuts by the Federal Reserve. But analysts have warned of the risk of tariffs filtering into prices in the coming months. Following Israel's strikes, crude prices , jumped more than $9 on fears of supply disruptions in the oil-rich region, which could also add to price pressures. Later in the day, investors will assess the University of Michigan's preliminary survey for a look at how consumers have fared this month. Final consumer inflation reports are also expected out of Germany, France and Spain. Next week brings a host of central bank decisions from the Fed, the Bank of Japan and the Bank of England that could offer investors more clarity on the path ahead for interest rates. The risk-off mood also hit cryptocurrencies. Bitcoin eased over 2% to $103,938, while ether prices declined over 5.5% to $2,496. PM Shehbaz discusses regional situation with UAE presidentTaxes imposed on online businesses have come to the rescue. How much tax will the government have to pay? Find out from an economic expert.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Gold rises as soft dollar, Trump's tariff threats spur safe-haven demandGold rises as soft dollar, Trump's tariff threats spur safe-haven demand
Read more »
Oil prices rise on signs of faltering US-Iran nuclear talksOil prices rise on signs of faltering US-Iran nuclear talks
Read more »
Strikes on Gaza kill at least 60 people, local officials say, as criticism against Israel mountsStrikes on Gaza kill at least 60 people, local officials say, as criticism against Israel mounts
Read more »
Strikes on Gaza kill at least 60, local officials say, as criticism against Israel mountsStrikes on Gaza kill at least 60 people, local officials say, as criticism against Israel mounts
Read more »
Israel says it intercepted missile launched from YemenUndeterred by Israeli strikes on Yemen, the Houthis have continued to fire missiles at Israel
Read more »
After Israel strikes Iran, airlines divert flights, airspace closedFlights steadily diverted over Central Asia or Saudi Arabia, flight tracking data showed
Read more »