HG MARKETS:

The U.S. dollar strengthened on Friday after Israel announced it had carried out strikes on Iran. This development prompted investors to seek safety in the dollar, as well as other traditional safe-haven assets like the Japanese yen, Swiss franc, and gold. Early reports from Israel indicated that the strikes targeted Iranian nuclear sites, with the goal of preventing Tehran from developing atomic weapons. Iranian media and eyewitnesses also confirmed explosions, including at Iran’s primary uranium enrichment facility. Despite the heightened tensions, U.S. and Iranian officials are still scheduled for a sixth round of talks in Oman on Sunday, focusing on Iran’s expanding uranium enrichment activities. Meanwhile, Israel’s ambassador to the United Nations clarified that the decision to strike Iranian targets was an independent one made by their government.

Oil prices jumped over 9% on Friday, reaching a near five-month high, following an Israeli attack on Iran. This significantly intensified Middle East tensions and sparked fears of disruptions to global oil supplies. The single-day price increase was the largest seen since Russia’s invasion of Ukraine in 2022, which also caused energy prices to surge. Israel stated its targets in Iran included nuclear facilities, missile factories, and military leaders, initiating what it called a sustained effort to prevent Iran from developing nuclear weapons. While some oil traders in Singapore noted it’s premature to determine the impact on Middle East oil shipments, they emphasized that the situation’s severity will depend on Iran’s response and potential U.S. involvement. Iran’s Supreme Leader, Ayatollah Ali Khamenei, vowed “harsh punishment” for Israel’s attack, which he claimed killed several military commanders. Elsewhere in the markets, Asian stocks plummeted in early trading, led by a sharp decline in U.S. futures. Investors reacted by moving funds into traditional safe-haven assets like gold and the Swiss franc.