Geopolitical Tensions Propel U.S. Dollar Amid Israeli-Iranian Conflict

The U.S. dollar climbed on Friday as investors flocked to safe-haven assets like U.S. Treasury bonds and gold after Israel launched significant strikes against Iran, leading to retaliatory actions. Israel claimed its targets were military sites, prompting Iran to launch drone attacks.

Charu Chanana, Saxo's chief investment strategist, remarked that the geopolitical flare-up introduces further uncertainty to already delicate market sentiment. The crucial concern is whether this incident is fleeting or a precursor to broader regional conflict. Escalating tensions could threaten oil supply routes, sustaining upward pressure on crude prices and haven assets.

The U.S. dollar index, measuring the currency against six others, rose 0.61%, last recorded at 98.28. Despite the day's gains, the dollar remains close to its lowest point since March 2022, facing its largest weekly decline in weeks. Investors are bracing for upcoming interest rate decisions from global central banks.

(With inputs from agencies.)