Israel launched a barrage of strikes across Iran on Friday, attacking nuclear facilities and missile factories and killing a swath of military commanders. Iran responded with an armada of drones against Israeli targets.
U.S. President Donald Trump, Israel’s main ally, urged Iran to reach a deal on its nuclear program, suggesting that Tehran had brought the attack on itself by resisting a U.S. ultimatum in talks to restrict its uranium enrichment.
The dollar gained 0.62% to 144.36 against the Japanese yen and rose 0.39% to 0.813 against the Swiss franc , with the greenback on track to snap two straight sessions of losses against safe-haven currencies.
The dollar, however, is still poised for a weekly loss against both the yen and the franc, with markets worried about Trump’s tariffs.
Juan Perez, director of trading at Monex USA in Washington, said the U.S. dollar tends to gain in times of physical uncertainty and chaos including the Israel-Iran conflict, although tariffs remain the main concern among investors.
“This (Israel-Iran conflict) just landed on us but the main concern remains tariffs and obstacles to global trade,” Perez said. “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.”
The euro was down 0.67% at $1.1505, on track to snap four straight sessions of gains. It is on track, however, for the second consecutive weekly gain against the dollar.
The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, rose 0.82% to 98.48, snapping two straight sessions of losses. It is still set for a second consecutive week of losses.
Gold prices jumped amid safe-haven demand. Spot gold rose 1.68% to $3,441.04 an ounce. Oil prices jumped 7% to multi-month highs, buoyed by the Israeli-Iran conflict. Brent rose 7% to $74.23 per barrel.
“It’s difficult to fix every single item that we are facing this year that has crushed the market’s ability to believe in the U.S. dollar,” Perez added. “But at the same time, when it comes to the military and physical aggression or armed conflict, it seems like globally there’s still a consensus that you should jump towards historically the safest assets, which is the U.S. dollar as a currency and gold as a commodity to hold on to.”
