Middle East Tensions Boost Oil, Pressure Precious Metals

Renewed hostilities in the Middle East, including missile strikes between the United States and Iran, have roiled markets and caused a breakdown in peace negotiations. The geopolitical uncertainty fueled a surge in WTI oil prices and bolstered the US Dollar as investors sought safe-haven assets. Consequently, precious metals faced headwinds from the stronger dollar, with both gold and silver prices declining amid the escalating tensions.

Divergent Economic Data from Asia-Pacific Impacts Currencies

Economic reports from the Asia-Pacific region painted a mixed picture, leading to currency fluctuations. The Australian dollar weakened after the country's Q1 GDP growth came in below expectations, while a separate report showed its services sector contracted. In contrast, China's services activity expanded at its fastest pace in three months, providing a lift to proxy currencies like the New Zealand Dollar.

Japanese Yen Weakens Past 160, Sparking Intervention Warnings

The Japanese Yen slid to the key 160.00 level against the US Dollar, pressured by broad dollar strength and heightened geopolitical risk aversion. This significant depreciation prompted verbal warnings from Japanese financial authorities, who stated they are prepared to intervene in the foreign exchange market. The yen's decline occurred as markets also weighed the possibility of a near-term rate hike from the Bank of Japan.