Geopolitical Tensions Escalate in Middle East

Heightened geopolitical risk dominated market sentiment after the United States conducted military strikes on Iran following attacks on oil tankers in the Strait of Hormuz. In response, Washington also revoked Iran's crude oil sales waiver, which contributed to a jump in oil prices and broader stock market volatility. Amid the developing situation, gold prices faced selling pressure as investors assessed the widespread market impact.

US Dollar Surges on Safe-Haven Demand

A distinct flight-to-safety dynamic led to a broad-based rally in the U.S. Dollar, which strengthened against a basket of major currencies. The dollar’s gains pressured other currencies, including the Australian Dollar, the Euro, and the British Pound, which ended a multi-day winning streak. The dollar's move was also supported by cautious commentary on inflation from Federal Reserve officials.

Divergent Global Central Bank and Economic Outlooks

Elsewhere, global central bank policy expectations and regional economic data were in focus, with the Reserve Bank of New Zealand anticipated to raise its key interest rate. In Asia, reports indicated that Japanese asset managers are seeking global mandates amid growing demand for yen bonds, while the Chinese Yuan and Singapore Dollar traded in ranges against the strong U.S. Dollar. Meanwhile, analysis suggested that cheaper imports from China are exerting a deflationary influence on prices in the Euro area.