Greenback surges on safe haven appeal
The AUD/USD dropped 1.1% in early Monday trading as markets reacted to US and Israeli strikes on Iran over the weekend.
The US and Israel launched a series of attacks on Iran from Saturday morning local time, with Iran’s Supreme Leader, Ayatollah Khamenei, killed in the initial strikes.
Iran retaliated with multiple attacks on US and Israeli interests across the Middle East.
The US dollar surged in early Monday trade, with the USD index hitting a six‑week high.
Away from FX, gold looked set to gain around 1.0% in pre‑market trading, while crude oil looked likely to open as much as 5.0% higher.
Aussie, kiwi hit hardest
Across markets, safe havens like the US dollar and Swiss franc outperformed.
The Japanese yen struggled to make gains, with last week’s losses continuing after the appointment of monetary‑easing favouring policymakers Asada and Sato to the Bank of Japan.
The Australian dollar was the hardest hit in early trade, with the AUD/USD down 1.1%.
The Aussie also fell sharply against other majors, with notable losses versus the euro and Swiss franc.
The kiwi weakened as well, with the NZD/USD dropping back below 0.6000 after a 0.8% fall in early trading.
The USD strengthened across Asia, with USD/CNH up 0.3% as it extended last week’s rebound from three‑year lows.
USD/SGD jumped 0.6% to one‑month highs.
US jobs in focus this week
The key data event this week is the US jobs report. Investors have been treating US macro releases with caution. The dollar’s muted reaction to January’s strong NFP reflected soft dollar sentiment at the time, which now appears to have eased alongside a more hawkish Fed tone.
Also from the US, the Fed Beige Book is due. Messaging at the January meeting leaned hawkish as the FOMC held rates steady. We expect that bias to come through again, with the Fed shifting focus away from a previously soft labour market — now looking more stable — toward still‑above‑target inflation.
In the eurozone, the preliminary February inflation print is due. ECB officials remain committed to keeping rates unchanged for now. Still, renewed trade uncertainty and geopolitical risks pushing oil prices higher add a non‑negligible layer of uncertainty that may challenge the on‑target outlook.
In Australia, December‑quarter GDP on Wednesday and RBA speakers on Tuesday and Wednesday are the key events.
Greenback surges in safe haven move
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 2 – 7 March
All times AEDT
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