Forex Today: US Dollar surges above 98.50 as US-Israel strikes on Iran spark geopolitical crisis
Here is what you need to know on Tuesday, March 3:
The United States, allied with Israel, struck Iran over the weekend, killing Iran’s Supreme Leader, Ayatollah Ali Khamenei. In retaliation, Iran launched missile and drone attacks targeting US military bases across several nations, with attacks from both parties still ongoing, fueling a geopolitical crisis.
The US Dollar Index (DXY) is trading near the 98.50 price region, surging during the American session to a five-week high and drawing attention away from its safe-haven peer, Gold, after the US-Israel conflict with Iran spikes investors' awareness. Manufacturing activity in the US expanded in February. The ISM Manufacturing PMI eased slightly to 52.4 from 52.6 in January, and the ISM Manufacturing Employment Index rose to 48.8 from 48.1, while the New Orders Index fell to 55.8 from 57.1.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.89% | 0.39% | 0.66% | 0.21% | 0.17% | 0.71% | 1.22% | |
| EUR | -0.89% | -0.50% | -0.24% | -0.67% | -0.72% | -0.18% | 0.34% | |
| GBP | -0.39% | 0.50% | 0.25% | -0.17% | -0.22% | 0.32% | 0.83% | |
| JPY | -0.66% | 0.24% | -0.25% | -0.42% | -0.47% | 0.08% | 0.58% | |
| CAD | -0.21% | 0.67% | 0.17% | 0.42% | -0.04% | 0.48% | 1.01% | |
| AUD | -0.17% | 0.72% | 0.22% | 0.47% | 0.04% | 0.55% | 1.05% | |
| NZD | -0.71% | 0.18% | -0.32% | -0.08% | -0.48% | -0.55% | 0.50% | |
| CHF | -1.22% | -0.34% | -0.83% | -0.58% | -1.01% | -1.05% | -0.50% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
EUR/USD is trading near the 1.1700 level, starting the week lower as investors went risk-off throughout the day. Austria’s central bank governor and European Central Bank (ECB) member Martin Kocher said that the ECB should be ready to move interest rates “in either direction” if uncertainty intensifies.
GBP/USD is trading near 1.3420, with the US Dollar gaining ground after falling to 1.3314 earlier in the day, its lowest level since December 17 Local elections in northern England weakened Prime Minister Keir Starmer's position within his Labour Party, raising speculation that he could be replaced.
USD/JPY is trading near the 157.30 price region, as the US Dollar wins the safe-haven buyoff.
AUD/USD is trading near the 0.7100 price zone, as the Australian dollar (AUD) opened with a gap at the beginning of the session, trimming most of its intraday losses amid a spike in commodity prices.
Gold is trading at $5,330, trimming half its intraday gains during the American session as the USD draws investors' attraction from its bright competitor.
What’s next in the docket:
Tuesday, March 3:
- Australian January Building Permits.
- Eurozone HICP.
- Italian February flash CPI.
- Australian AiG Industry Index.
- Australian February S&P Global Composite PMI.
- Australian February Global Services PMI.
Wednesday, March 4:
- Australian Q4 GDP.
- Chinese February NBS Manufacturing PMIs.
- Chinese February RatingDog Services PMI.
- Swiss February CPI.
- Spain Feb HCOB PMI.
- Germany Feb HCOB PMI.
- Eurozone Feb HCOB PMIs.
- Eurozone Jan PPIs.
- Italian Q4 GDP.
- US ADP Employment Change.
- US S&P Feb Global Composite PMI
- US Feb ISM Services Employment Index.
- US Feb ISM Services New Orders Index.
- US Feb ISM Services PMI.
- US Feb ISM Services Prices Paid.
- US Fed's Beige Book.
Thursday, March 5:
- Australian January Trade Balance.
- Eurozone January Retail Sales
- US February Challenger Job Cuts
- US Initial Jobless Claims
- US flash Nonfarm Productivity
- US flash Unit Labor Costs (Q4).
Friday, March 6:
- Germany January Factory Orders n.s.a.
- Eurozone Employment Change (Q4).
- Eurozone GDP (QoQ) (Q4).
- US February Average Hourly Earnings.
- US February Labor Force Participation Rate.
- US February Nonfarm Payrolls.
- US January Retail Sales.
- US February U6 Underemployment Rate.
- US February Unemployment Rate
- Canadian February Ivey PMIs.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
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