US dollar advances against major currencies amid Middle East conflict, all you need to know
The US dollar has shown trends of steady increase against major currencies like the Euro and Yen, at a time when the conflict in the Middle East is rising. As Israel launched an attack against Iran, with a retaliatory attack expected, the US dollar stayed strong, gaining 0.3% to 143.88 against the Japanese yen and 0.1% to 0.8110 franc against the Swiss currency, according to a Reuters report.
Israel and Iran are currently stuck in a major geopolitical conflict, with the United States already starting to move its military resources towards the Middle East. Israel launched a barrage of strikes across Iran on Friday, attacking nuclear facilities and missile factories, which made things even worse between the countries. A retaliatory attack is expected from Iran, as per reports.
"Historically speaking, with these kinds of geopolitical events, you get the knee-jerk reaction from the market ... History tells us to kind of look past a lot of this stuff," Jack Janasiewicz, portfolio manager, at Natixis Investment Managers was quoted as telling Reuters.
'There are a couple of things worth highlighting. How long does this operation go for? The longer this goes, obviously the worse it gets for confidence, and that eventually will start to weigh on the market,' Jack continued.
"This (Israel-Iran conflict) just landed on us, but the main concern remains tariffs and obstacles to global trade," Juan Perez, director of trading at Monex USA told.
'When you actually have a physical situation and potential for armed conflict to be prolonged and to escalate, the U.S. dollar and gold jump into safe-haven assets. It's a bit of a psychological reaction,' Perez continued, according to Reuters.
Perez also said that it is difficult to fix every single item that is being faced this year, crushing the US market's ability to believe in the US dollar.
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