Currencies Hold Steady as Markets Await Trump’s Iran Speech
Currencies stay steady as investors await Donald Trump’s Iran speech, with markets cautious. It is amid the geopolitical tensions and uncertainty over the argument outlook.
Global currencies held steady as investors awaited Donald Trump’s speech on Iran, with markets remaining cautious amid geopolitical uncertainty and expectations of potential shifts in the conflict outlook.
The dollar rose immediately on Thursday after U.S. President Donald Trump's speech on Iran shattered hopes for a swift end to the Geopolitical tensions. It is sending investors towards secure-haven assets as oil prices jumped and stocks fell.
In a television interview, Donald Trump warned of rising military action against Iran in the coming two to three weeks. However, he doesn’t give any specific timeline for reopening the Strait of Hormuz. There is no news to end to the conflict. It has shaken the confidence of the investors and disrupted global markets. On the other hand, Iran's military responded with a warning to the US and Israel for broad and destructive attacks in store.
Investors swiftly dumped riskier assets like equities and flocked to the U.S. dollar. It is driving with the yen, euro, and sterling lower.
The US dollar index calculates the greenback against a basket of currencies. It moved from 0.68% to 100.24 as the safe-haven trade came back on, keeping it back on track for its best day since March 18.
The greenback’s surge on Thursday wiped out most of its losses from the last two sessions. It is amid earlier optimism over easing Iran tensions. It is about to set up for another weekly gain.
Carol Kong, a currency strategist at Commonwealth Bank of Australia, said: "Trump's comments failed to reassure markets ... markets are starting to realise that the war will probably escalate further from here before de-escalating".
She also added, "The dollar can definitely increase further from here against all the major currencies" as markets wake up to the fact that the global economy will slow down materially.
