Forex News
- EUR/USD retreats below 1.1450 after rejection at the 1.1480 range top.
- Cautious markets amid rising geopolitical tensions and higher Oil prices are weighing on the Euro.
- Technically, the pair is going through sideways consolidation after the May-June selloff.
The Euro (EUR) records mild losses against the US Dollar (USD) for the second consecutive day on Friday. The EUR/USD pair trades at 1,1430 after being capped at 1.1480 earlier this week, extending the sideways trend, as geopolitical tensions and higher oil prices keep Euro rallies subdued.
Hostilities in Iran escalated this week, with the US military killing eight people after attacking civilian targets in Bandar Abbas on Friday, while Tehran threatened to close the Bab el-Mandeb strait, another key corridor for gas and oil traffic.
The deteriorating situation in the Middle East has pushed oil prices higher this week. The barrel of Brent Crude is set to close the week near $85.00, about 18% above early June lows. This has offset the positive impact on the Euro of the soft US inflation data and lowered hopes of Federal Reserve (Fed) tightening.
Technical Analysis: The pair keeps looking for direction around 1.1400
The technical picture is little changed this week. EUR/USD keeps trading within a roughly 100-pip range, with momentum indicators on intraday charts showing a lack of clear bias. The 4-hour Relative Strength Index (14) is wavering near the 50 midline, and the Moving Average Convergence Divergence (MACD) slips fractionally negative, together hinting at subdued momentum.
On the topside, initial resistance emerges in the area between the mentioned range top, near 1.1480, and a previous support at the 1.1500 area (June 8 and 11 lows). A break above these levels would encourage bulls to target the June 16 and 17 highs, near 1.1620.
On the downside, immediate support is seen at the July range floor, between 1.1360 and 1.1380, which, so far, is closing the path towards the year-to-date low, at 1.1324. Further down, bears might be attracted by the late-May 2025 low, at 1.1210.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro Price This week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.26% | -0.39% | 0.34% | -0.95% | -0.44% | -1.24% | -0.10% | |
| EUR | 0.26% | -0.13% | 0.63% | -0.70% | -0.23% | -0.98% | 0.17% | |
| GBP | 0.39% | 0.13% | 0.72% | -0.56% | -0.09% | -0.85% | 0.35% | |
| JPY | -0.34% | -0.63% | -0.72% | -1.37% | -0.79% | -1.62% | -0.49% | |
| CAD | 0.95% | 0.70% | 0.56% | 1.37% | 0.59% | -0.25% | 0.92% | |
| AUD | 0.44% | 0.23% | 0.09% | 0.79% | -0.59% | -0.75% | 0.31% | |
| NZD | 1.24% | 0.98% | 0.85% | 1.62% | 0.25% | 0.75% | 1.21% | |
| CHF | 0.10% | -0.17% | -0.35% | 0.49% | -0.92% | -0.31% | -1.21% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
TD Securities’ Macro Research team, led by Howard Du with contributions from Jayati Bharadwaj and Linda Cheng, argues that the recent Pound strength versus the Euro has overshot fundamentals. They highlight that EUR/GBP has broken below a key 0.86 support on reduced UK political risk, but still forecast a return to 0.86 in 2026 as macro and policy drivers realign.
TD sees EUR/GBP undervaluation stretched
"The GBP has idiosyncratically rallied on falling UK political risk premium in July. We see the EUR/GBP move as overdone vs macroeconomic fundamentals and continue to forecast a return to 0.86 for this pair in 2026."
"0.86 has been a key support level for EUR/GBP throughout the past year, but falling UK political risk in July led to a notable selloff in this pair. Starmer's official resignation on June22 kicked off the bearish EUR/GBP momentum. Burnham's commitment to existing UK fiscal rules and headlines of Miliband potentially not becoming the next UK Chancellor further reduced political risk premium and pushed EUR/GBP below 0.85."
"As a result, EUR/GBP spot now sits at the cheapest level vs our high-frequency fair value estimate since March 2025. A recent analog of persistent EUR/GBP cheapness vs fair value would be May-July 2024. At the time, EUR/GBP also fell from 0.86 to 0.84 on the start of ECB rate cutting cycle and elevated French political risk."
"While we do not expect the BoE to cut rates imminently, we still expect its next move as more likely to be a cut than a hike. We also see further ECB-BoE monetary policy convergence as the ECB hike rates in September, and for UK political risk premium to rebuild in Q4 2026 as the market scrutinizes UK Autumn Budget."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Brown Brothers Harriman’s Elias Haddad notes that the Dollar has recovered part of this week’s losses as a tech-led equity selloff spurs a modest flight to safety. Haddad expects USD to edge somewhat higher over the next couple of months, supported by US economic outperformance, hawkish Federal Reserve pricing and strong foreign demand for US long-term securities.
Flight-to-safety support as equities slide
"USD recovered some of this week’s losses as the tech-led equity market plunge triggered a modest flight to safety."
"We expect USD to edge a bit higher in the next couple of months underpinned by: (i) US economic outperformance, (ii) the Fed's resolve to get inflation back to 2% anchoring hawkish rate pricing, and (iii) strong foreign demand for US long term securities."
"US consumer spending activity remains resilient. In line with consensus, US retail sales rose 0.2% m/m vs. 1.0% in May and the more policy relevant control-group sales - which exclude cars, gas, food services, and building materials – increased 0.5% m/m vs. 0.8% in May. Retail sales in real term is particularly solid given that headline CPI fell -0.4% m/m in June."
"July University of Michigan sentiment survey is also due today (3:00pm London, 10:00am New York). Long-term inflation expectations are critical to watch for confirmation that long-term inflation expectations remain anchored."
"Today, US June housing starts, import and export prices, and industrial production data will feed into the Atlanta Fed GDPNow model update. As of yesterday, the model estimates annualized US real GDP growth of 1.7% q/q in Q2, up from 1.4% but down from the 4.3% peak in mid-May and below its 3.0% average since late April."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- The Indian Rupee gains slightly, following the RBI’s intervention.
- Fears of further decline in the global oil supply would keep INR’s upside limited.
- Easing hawkish Fed bets will likely keep the US Dollar under pressure.
The Indian Rupee (INR) trades marginally higher against the US Dollar (USD) while entering the weekend. The USD/INR pair ticks down to near 96.30 as the Indian currency rises, following Reserve Bank of India’s intervention.
According to a Reuters report, the Indian central bank likely intervened to limit the Indian Rupee's fall. The report also showed that the central bank has been intervening almost daily in both the spot and non-deliverable forward markets to support the currency; however, the scale of intervention has been relatively measured considering the intensity of the pressure on the rupee.
However, the support regained by the Indian currency after underperforming the entire week could prove to be short-lived amid fears of further escalation in global energy supply disruption.
In the opening trade, the MCX Crude Oil contract expiring on July 20 is up 1.16% to near Rs. 7,700, close to its monthly high of Rs. 7,832 posted on Tuesday.
Currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs, tend to underperform in a high-oil-price environment.
Iran threatens the closure of Red Sea if US attacks Iranian infrastructure
Earlier in the day, Iran asked Yemen’s Houthi militia to stand ready to close the Red Sea oil route if the United States (US) strikes Iranian power infrastructure, Reuters reported. Such a scenario would trim the already-low global oil supply, which could further accelerate fears of high inflation globally.
The threat from Iran is a response to remarks from US President Donald Trump, in an interview with Fox News, in which he said that military forces would be authorized to attack Iranian bridges and power plants if the nation doesn’t come to the table for negotiations.
US Dollar gains on risk-off mood
An improvement in the demand for safe-haven assets amid intensifying military aggression between the US and Iran has boosted the appeal of the US Dollar. At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.1% higher to near 100.80.
However, the Greenback will likely conclude the week on a negative note, as traders have trimmed Federal Reserve (Fed) interest rate hike bets, following the release of the soft US Consumer Price Index (CPI) report of June on Tuesday.
According to the CME FedWatch tool, the odds of the Fed delivering an interest rate hike in the meeting later this month have dropped significantly to 10.2% from 24.6% recorded a week ago.
India's growth fundamentals remain strong despite headwinds
Earlier in the day, RBI Governor Sanjay Malhotra said in an interview with Doordarshan that India's fundamentals remain strong, and the economic expansion will remain intact at a higher pace despite geopolitical tensions. RBI's Malhotra warned that ongoing tensions in the Middle East and the prospects of a weak monsoon season are seen as key risks for the economy.
Technical Analysis: USD/INR approaches all-time high near 97.10
USD/INR trades at around 96.30, maintaining a bullish near-term bias as it holds above the 20-day Exponential Moving Average (EMA) at 95.55. The pair extends its advance after reclaiming the short-term trend indicator, while the Relative Strength Index (14) at 62.99 stays in positive territory, hinting that upside momentum remains constructive but not yet overbought.
On the downside, immediate support is seen at the 20-day EMA at 95.55, which reinforces the underlying bullish structure as long as it holds. Looking up, the all-time high at around 97.10 will be the key barrier for the pair.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
OCBC Bank strategists Sim Moh Siong and Christopher Wong note the Swiss Franc (CHF) has lost much of its safe-haven appeal as Swiss National Bank (SNB) intervention risk and low yields weigh on performance. With inflation below the midpoint of the SNB’s target range and policy rates likely stuck at zero against rising global yields, CHF is expected to remain one of the laggards in G10 FX.
Safe-haven appeal curtailed by SNB
"The CHF underperformed as low yields and the Swiss National Bank's (SNB) willingness to intervene in the FX market continued to weigh on the currency. In the summary of its 18 June policy meeting, the SNB said monetary conditions remain appropriate and saw no immediate need for further action despite rising upside inflation risks."
"Since the outbreak of the US-Iran conflict, the SNB's increased willingness to intervene, if necessary, has curtailed the CHF's safe haven appeal. As a result, the CHF has been driven largely by interest rate dynamics rather than risk aversion."
"Swiss inflation remains below the midpoint of the SNB's 0-2% price stability range, suggesting policy rates are likely to stay at zero for at least the rest of the year."
"Against a backdrop of rising global yields, this should keep the CHF on the back foot despite Switzerland's sizeable current account surplus."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- The British Pound faces intense selling pressure amid the UK leadership change.
- Shabana Mahmood will likely become the new UK Finance Minister.
- Investors await the UK employment and CPI data, which will be released next week.
The British Pound (GBP) extends its decline against the US Dollar (USD) for the second straight day on Friday, trading 0.4% lower to near 1.3427 during the European trading session on Friday. The GBP/USD pair faces selling pressure as the British currency weakens amidst the process of the United Kingdom (UK) leadership change.
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the weakest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.12% | 0.33% | -0.03% | -0.04% | 0.40% | 0.23% | -0.13% | |
| EUR | -0.12% | 0.21% | -0.17% | -0.19% | 0.26% | 0.11% | -0.25% | |
| GBP | -0.33% | -0.21% | -0.37% | -0.41% | 0.03% | -0.09% | -0.47% | |
| JPY | 0.03% | 0.17% | 0.37% | -0.02% | 0.44% | 0.24% | -0.10% | |
| CAD | 0.04% | 0.19% | 0.41% | 0.02% | 0.46% | 0.29% | -0.08% | |
| AUD | -0.40% | -0.26% | -0.03% | -0.44% | -0.46% | -0.18% | -0.53% | |
| NZD | -0.23% | -0.11% | 0.09% | -0.24% | -0.29% | 0.18% | -0.36% | |
| CHF | 0.13% | 0.25% | 0.47% | 0.10% | 0.08% | 0.53% | 0.36% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Andy Burnham becomes Labour leader on Friday, but he will not become Prime Minister (PM) until Monday, as PM Keir Starmer will officially deliver his resignation to King Charles that day,
While the Pound Sterling has been underperforming from Thursday, it is set to end the week on a positive note. The currency performed strongly earlier this week after reports from Financial Times (FT) that incoming PM Burnham will name Shabana Mahmood as Finance Minister (FM), who is considered a fiscal conservative by financial markets.
On the economic data front, investors await the UK employment data for the three months ending May and the Consumer Price Index (CPI) data for June, which will be released next week.
Meanwhile, the US Dollar trades marginally higher amid fears of a resurgence in United States (US) inflation amid elevated energy prices on the back of continued aggression in the Middle East.
GBP/USD technical analysis
GBP/USD trades sharply lower at around 1.3430. However, the pair maintains a modest bullish bias as spot remains above the 20-day exponential moving average (EMA) at 1.3380. The pair declines after facing selling pressure near the downward-sloping border of the Descending Triangle formation above 1.3500.
The Relative Strength Index (14) at 54.9 sits in neutral-positive territory, hinting that buying pressure is constructive but not yet overextended.
On the downside, immediate support is located at the 20-day EMA around 1.3380, where a sustained break would undermine the current positive tone and expose a deeper correction towards 1.3300. On the topside, the first key obstacle is the descending resistance trend line near 1.3515; a daily close above this barrier would reinforce the bullish bias and open the door to further gains in the days ahead.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- The Australian Dollar weakens against the US Dollar, with AUD/USD trading around 0.6970, down 0.36% on Friday.
- Escalating tensions between the United States and Iran are boosting safe-haven demand and supporting the US Dollar.
- The RBA's relatively hawkish stance and resilient Chinese economic data could still limit the Aussie’s downside.
AUD/USD trades around 0.6970 on Friday at the time of writing, down 0.36% on the day, as the Australian Dollar (AUD) comes under pressure for a second consecutive day amid renewed US Dollar (USD) strength. Despite the latest pullback, the pair is still on track for a third consecutive weekly gain.
The US Dollar is attracting renewed demand amid a sharp deterioration in market sentiment. The escalation of the conflict between the United States (US) and Iran is driving safe-haven flows, while concerns over disruptions to global energy supplies are reviving inflation fears. The latest developments indicate that the US continues its strikes against Iranian infrastructure, while Iran's Islamic Revolutionary Guard Corps (IRGC) claims to have targeted several US military facilities and has threatened to expand attacks to regional energy routes. Reports suggesting a possible closure of the Strait of Hormuz and the Red Sea Oil route by the Houthis are also keeping energy markets on edge.
These renewed inflation concerns come alongside resilient US economic data. Weekly Initial Jobless Claims declined more than expected, while the Philadelphia Fed Manufacturing Index surged, highlighting the continued strength of the US economy. In addition, several Federal Reserve (Fed) officials, including Lorie Logan and Philip Jefferson, maintained a hawkish tone, suggesting that another interest rate hike could be warranted if inflation fails to show sufficient improvement.
However, the outlook for the Australian Dollar continues to receive support from the Reserve Bank of Australia's (RBA) relatively hawkish policy stance. Meanwhile, economic data from China continues to point to resilient activity, providing an additional tailwind for the Aussie given the close trade relationship between the two economies.
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.14% | 0.37% | -0.03% | -0.02% | 0.41% | 0.22% | -0.11% | |
| EUR | -0.14% | 0.24% | -0.19% | -0.19% | 0.28% | 0.09% | -0.25% | |
| GBP | -0.37% | -0.24% | -0.41% | -0.41% | 0.03% | -0.14% | -0.49% | |
| JPY | 0.03% | 0.19% | 0.41% | 0.00% | 0.45% | 0.24% | -0.08% | |
| CAD | 0.02% | 0.19% | 0.41% | -0.00% | 0.45% | 0.26% | -0.08% | |
| AUD | -0.41% | -0.28% | -0.03% | -0.45% | -0.45% | -0.20% | -0.54% | |
| NZD | -0.22% | -0.09% | 0.14% | -0.24% | -0.26% | 0.20% | -0.34% | |
| CHF | 0.11% | 0.25% | 0.49% | 0.08% | 0.08% | 0.54% | 0.34% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
- Gold ticks up from session lows at the $3,965 area but remains capped below the $4,000 level.
- Growing tensions between the US and Iran and rising Oil prices keep weighing on Gold
- XAU/USD is on track for a 3% weekly decline, with the YTD low of $3,941 at a short distance.
Gold (XAU/USD) shows moderate gains on Friday, but remains close to the year-to-date lows, at the $3,940 area, with upside attempts capped below the $4,000 psychological level for now. The precious metal is set for a 3% weekly decline, as the resumed hostilities between the US and Iran and the higher Oil prices have offset the positive impact of lower US Treasury yields.
Bullion tumbled on Thursday as tensions in Iran escalated with US President Donald Trump threatening to target civilian infrastructure, like power plants and bridges. Tehran, in turn, flagged the closure of the Strait of Bab el-Mandeb, a move that would strangle Oil supply further and bring the global economy to the brink of recession.
Technical Analysis: The YTD low of $3,941 is coming under pressure
XAU/USD trades remain on a bearish trend from February's highs with no clear sign of a trend shift on the horizon, other than the bullish divergence in the Relative Strength Index (RSI). Momentum indicators in the 4-hour remain in bearish territory, with the mentioned RSI below 40 and the Moving Average Convergence Divergence (MACD) just below zero, suggesting that rallies will find sellers.
The psychological $4,000 level is holding bulls at the time of writing, closing the path towards the trendline resistance at $4,075 and mid-July highs in the $4,100 area. A clear break of these levels is needed to ease bearish pressure and shift the focus towards July's peak, in the $4,200 area.
On the downside, the year-to-date low, at $3,941, remains at a short distance. Further down, the October 2025 low, at $3,886, emerges as the next target, ahead of the 127.2% Fibonacci extension of the late-June downleg, at the $3,830 area.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Iran’s Islamic Revolutionary Guard Corps (IRGC) warns of "more crushing" retaliation during the European trading session against the United States (US) and countries supporting it for hosting its bases.
Earlier in the day, Iran warned of closing the Red Sea if the US strikes Iranian infrastructure.
The IRGC has also said that they had targeted the US Al Udeid base in Qatar.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
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