The dollar was steady on Monday, while the yen flirted with the crucial 160 per dollar level as nervous investors took stock of the escalating Iran war.
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The dollar rose sharply from two straight sessions of losses on Thursday after U.S. President Donald Trump’s speech on Iran undermined market expectations of a swift end to the conflict, renewing a bid for safe-haven assets.
Trump vowed more aggressive strikes on Iran in the next two to three weeks during his televised speech on Wednesday, offering no concrete timeline to open the Strait of Hormuz or end a war that has rattled investors and roiled markets.
Iran’s military responded with a warning for the U.S. and Israel of “more crushing, broader and more destructive” attacks in store.
The U.S. dollar rose, even against other safe-haven currencies including the Swiss franc and the Japanese yen.
The dollar strengthened 0.6% to 0.799 against the Swiss franc .
Against the Japanese yen , the dollar was up 0.5% at 159.57, nearing the psychologically important 160 level that sparks investor worries of intervention by Japanese authorities.
“In the last couple of days there was a bit of optimism that the war was going to end soon and President Trump’s address to the nation yesterday sort of undermined that hope,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.
“There’s nothing new that he said; it’s just that he didn’t provide any kind of morsels to feed the hope. I think this is the only fundamental right now that matters. If you think the war is going to end soon, you buy risk. If you think that it’s not going to end soon, you sell risk.”
The euro fell 0.45% to $1.1536 while sterling slid 0.63% to $1.3222 , with both giving up some recent gains.
The dollar index , which measures the greenback against a basket of currencies, climbed 0.46% to 100.02.
“The tone of President Trump’s address appears to have added to market concerns, as he spoke of an intensification of strikes over the next two to three weeks and threatened the possibility of hitting Iran’s power plants if a deal was not reached. The market reaction has been swift, delivering a near full reversal of most G10 currencies’ week-to-date gains,” Scotiabank analysts led by Shaun Osborne said in an investor note.
Brent crude futures rose 7.78% to settle at $109.03 per barrel, after Trump’s address sparked fresh concerns about sustained disruption.
Investors eye U.S. jobs report
Trump’s comments had initially sent U.S. Treasury yields higher but they have since pared those gains. The yield on benchmark U.S. 10-year notes fell 1.6 basis points to 4.305%.
Investors are also eyeing Friday’s U.S. non-farm payrolls report for economic signals and a possible path to Federal Reserve interest rates. The market is looking for a 60,000 rise in jobs for March, according to the median estimate of economists polled by Reuters. (USNFAR=ECI), opens new tab
The Australian dollar weakened 0.3% versus the greenback to $0.6904. The euro strengthened 0.12% against the Swiss franc to 0.921.
