DXY: US Dollar Pulls Ahead in FX as Iran-Israel Tensions Boost Safe Haven Demand
Less than 1 min read
Key points:
- US dollar rises in FX deals.
- Middle East tensions spike.
- High volatility to be expected.
King dollar is leading the forex charts on Wednesday as unnerved investors piled up long bets after Iran fired at Israel.
- The US dollar
DXY got a boost after global markets got jolted by widening war tensions. In the Middle East, Iran fired dozens of ballistic missiles at Israel hours after an Israeli ground operation took place in Lebanon. While Israel was going after Hezbollah and Tehran was raining rockets on Israel, traders and investors were scrambling to find a place of safety where they could wait out the war storms. - In that context, the greenback was a natural pull for risk-off traders. The US dollar index jumped about half a percent on Tuesday and stayed well-bid Wednesday, floating near 101.30 and looking to log a three-day winning streak. Once again, the buck dominates forex deals — the USD/JPY shot up to levels near ¥144.00 and the EUR/USD fell off a cliff, down 0.7% yesterday to $1.1060. Traders continue to follow the situation.
- And the situation doesn’t look bright. Israel vowed to retaliate against Iran’s missile attack. Prime Minister Benjamin Netanyahu said the Islamic Republic will “pay” after it fired about 180 rockets at key targets in Israel. As fears grow of a wider all-out war between these two superpowers, market volatility could be sharp, sudden and unexpected. Make sure to monitor and structure your portfolio accordingly.