USD jumps as Middle East risks keep markets on edge
The US dollar climbed towards its highest level since May 2025 as US President Donald Trump said he was considering a “massive attack” on Iran after Houthi militants said they had attacked two Saudi Arabian oil tankers in the Red Sea.
Geopolitical tensions in the Middle East intensified after reports of explosions in Bahrain, Jordan and Saudi Arabia following further Iranian attacks.
President Trump warned that any disruption to shipping would trigger strikes on Iranian bridges and power infrastructure.
In response, Tehran threatened retaliatory measures against US allies across the region, raising concerns that the conflict could widen further.
Across markets, investors reacted in a clear, fear-driven move. Oil surged, with Brent crude up 7.0% to more than USD100 per barrel. US 10-year bond yields reached 18-month highs, while German yields reached 15-year highs. The S&P500 fell 1.2%.
Aussie lower despite jobs surge
Australia’s labour market delivered a much stronger-than-expected result, with employment rising by 76.3k in June versus forecasts of 16.4k.
The unemployment rate held steady at 4.4%, while the participation rate jumped 0.3 percentage points, an unusually large increase outside the pandemic period. The data points to solid hiring momentum and a resilient jobs market.
However, not all indicators strengthened. Total hours worked rose only 0.2%, lagging the 0.5% increase in employment, while the underemployment rate ticked up 0.2 percentage points to 6.5%.
AUD/USD was initially higher but followed most other markets lower overnight. Major technical resistance is seen at 0.7050. The 21-day EMA at 0.6981 remains key support, followed by 0.6950.
In other markets, AUD/NZD climbed to a one-week high, while AUD/GBP reached a one-month high, highlighting broad AUD strength. AUD/JPY neared multi-decade highs.
Greenback higher in Asia
The US dollar was also higher across Asia.
USD/JPY hit its highest level since 1986, with the pair trading as high as 163.99.
USD/SGD moved to a one-week high. Initial support is located near the 50-day EMA at 1.2878, followed by the 100-day EMA at 1.2847.
On the upside, resistance is seen at the psychological 1.2950 level. As noted previously, any rebounds in USD/SGD may continue to attract selling interest at current levels.
USD/CNH was up 0.1% as the pair continues to find major support at 6.75.
USD nears May 2025 highs
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 20 – 24 July
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
