Meanwhile, the Dollar Index traded slightly lower at 99, but the weekly picture is different: the index is set for about a 1.4% gain this week, its strongest since November 2024.

• Gold (XAU/USD): 5,122.71 USD
• Euro (EUR/USD): 1.1612 USD
• USD/JPY: 157.5 Yen
• Brent Crude: 85 USD

Middle East Tensions Drive Dollar Demand

At the start of the week, markets had priced in a short-lived diplomatic easing. However, news from the field quickly erased that expectation.

US and Israeli warplanes struck certain areas in Iran, while Gulf cities faced renewed bombardment. Iran warned that the sinking of an Iranian warship would be “a step Washington will bitterly regret.”

Investors’ reflexes in this atmosphere are familiar:

• Dollar strengthens

• Risk assets face pressure

• Energy prices surge

IG market analyst Tony Sycamore notes that if the current intensity of the tension persists, the picture could become clearer: higher inflation, a stronger dollar, and a reduced chance of Fed rate cuts.

Oil Prices Rekindle Inflation Concerns

The first market impact of geopolitical risk has been on energy.

Brent crude futures surged to 85 USD, reaching the highest level since 2024. Weekly gains are roughly 5%, marking one of the sharpest weekly jumps since March 2022.

This surge in energy prices particularly means new inflationary pressures for economies dependent on energy imports.

The market scenario is simple:

high oil → higher inflation → later interest rate cuts.

This shift in rate expectations is also visible in money market instruments. Overnight Index Swaps (OIS) indicate that the Federal Reserve’s first rate cut has been postponed to either September or October.

Euro and Yen Under Pressure

Against the stronger dollar, major currencies spent the week on the defensive.

• Euro: around 1.1612 USD, flat

• Japanese Yen: 157.5 per USD

• Sterling: 1.3361 USD

Major pairs may look stable, but the trend is clear: dollar strength dominates.

Skye Masters, head of market research at National Australia Bank, highlights two historical experiences in investors’ minds: post-pandemic supply shocks and inflation after the Russia-Ukraine war. A new energy-driven price spike is therefore seen as a serious risk.

Global Markets Volatility

Tensions are not limited to currency markets. Equities and bonds also faced pressure.

On Thursday, US stock indices saw sharp declines:

• Dow Jones: down ~785 points (%1.6)

• S&P 500: down ~0.6%

• Nasdaq Composite: down ~0.3%

Dow Jones thus approaches its worst weekly performance since October.

Meanwhile, futures markets show limited recovery signs:

• Dow Jones futures

• S&P 500 futures

• Nasdaq 100 futures

All trade slightly higher on the final day, yet market sentiment remains cautious.

Crypto Markets See Limited Pullback

During geopolitical risk periods, crypto markets often react in complex ways. This time is no exception.

• Bitcoin: ~70,956 USD

• Ethereum: ~2,074 USD

Daily declines for both assets hover around 0.3%, suggesting risk mitigation rather than panic selling.

Eyes on US Employment Data

Geopolitical developments dominate, but macro data still matters.

Recent data show:

• Weekly jobless claims remained unchanged

• Layoffs fell sharply in February

Economists are now focused on nonfarm payrolls. Surveys predict 59,000 new jobs in the US for February, after 130,000 in January.

Economists expect the unemployment rate to remain at 4.3% in February.

Short-Term Market Outlook

Analysts see room for the dollar to stay strong short-term, largely tied to the risk premium in oil prices.

Jayati Bharadwaj, head of FX strategy at TD Securities, notes that dollar gains will depend on how the Iran geopolitical process unfolds. If the conflict remains contained, markets may rebalance.

For now, the picture is different. Risk appetite is low. Energy prices are high. And the dollar… naturally strong.

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The post Dollar Rises: Euro, Gold, and Oil Prices Move appeared first on Coin Engineer.

Although US stock markets opened with declines, losses were quickly recovered. Oil and gold prices initially rose but then fell back. The global MSCI index only dropped by 0.12%. Safe-haven assets showed mixed performance: the Japanese yen lost 0.64% against the dollar, while gold prices slightly decreased. Experts attribute the market calmness to expectations that the military intervention will not be prolonged. The Trump administration is keeping its military actions against Iran limited and deterrent. The prevailing belief is that the regional conflict will not escalate. 

Geopolitical Risks Are Controlled by Markets 

According to Dan Ives from Wedbush, the removal of Iran’s nuclear threat is positive for the market. At this stage, the possibility of the Iran-Israel conflict turning into a regional war is considered low. Therefore, markets are not panicking. 

Peter Boockvar, investment officer at Bleakley Financial Group, states that market stability will be maintained if Iran ends its military nuclear program. Iran is not expected to take actions that would disrupt global oil supply. Michael Hartnett, strategist at Bank of America, says Trump does not want gas prices to remain above $4. It is also predicted that Trump will continue to pressure Russia and Saudi Arabia to increase oil production. 

Iran’s Countermeasures and the Strait of Hormuz Risk 

Despite Iran’s parliament deciding to close the Strait of Hormuz, market concerns remain limited. Experts emphasize that the likelihood of Iran implementing this threat is low. Marko Papic from GeoMacro Strategy says Iran’s countermeasures will be limited. If the Strait of Hormuz is closed, oil prices would surge above $100, panic would ensue in markets, and stocks could fall more than 10%. However, this scenario is considered unlikely. 

In the past, Iran has made similar threats but did not close the strait. Papic notes that Iran is aware of the heavy retaliation that would come from the US. 

Three Possible Scenarios for Oil Prices According to Analysts 

• Morgan Stanley analyst Martijn Rats outlines three scenarios shaping oil prices: 
• Oil flow continues uninterrupted, Brent crude falls to around $60. 
• Iran’s oil exports decline significantly, eliminating global oversupply, prices hover between $75-80. 
• Expanded conflict threatens Gulf oil exports, prices could rise to $140 as in 2022. 
• Whether price movements are temporary or permanent is critical. Recently, WTI oil prices rose by 10%, Brent crude by 18%. 

Long-Term Positive Outlook for US Stocks 

Ed Yardeni, founder of Yardeni Research, states that geopolitical developments will not change the long-term upward trend of US stock markets. Trump’s limited military intervention increases market confidence. Yardeni suggests the destruction of Iran’s nuclear sites could create structural changes in the Middle East. Short-term uncertainty and volatility are possible, but market confidence could strengthen over time. 

The expectation that Iran will respond limitedly and that the conflict can be controlled keeps investors cautiously optimistic. 

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The post What Will Happen to Oil and Markets After Trump’s Attack on Iran?  appeared first on Coin Engineer.