The extends its recovery with fears of a wider Middle East conflict boosting demand for safe assets.
Iranian authorities have threatened with "severe consequences to the US
From a wider perspective, however, the US Dollar remains on the defensive after having depreciated 8.5% so far this year.
The Dollar has reclaimn¡med its traditional safe-haven status, with investors rushing away from risk on concerns about the possibility of a wider conflict in the Middle East after this weekend’s attack on Iran’s nuclear sites.
The US Dollar is the strongest of the G8 currencies on Monday. The US Dollar Index, which measures the value of the Greenback against the world’s most traded currencies, has jumped above last week’s highs and is trading right below June’s top, at 99.40.
The US launched an attack on some of the key Iranian nuclear plants last weekend, including the critical underground Fordow facility, which, according to President Trump, has devastated the country’s Nuclear program.
Iranian officials have vowed revenge that will have “severe consequences for the US. With the world holding its breath to avoid a wider regional war that will spill well beyond the Iranian borders, the risk-off sentiment is boosting the US Dollar to the detriment of riskier currencies.
The index, however, still remains 2.5% below mid-May highs and nearly 10% below January’s highs. The softer macroeconomic data and Trump’s erratic policies have seriously damaged the US economic outlook and have been undermining US dollar demand for the last few months.
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