Markets Resilient Amid Rising Geopolitical Tensions

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Forex Market 

USD Drifts Lower as Risk Appetite Holds Despite Middle East Tensions

The US dollar drifted lower as markets absorbed escalating Middle East tensions with notable resilience. Despite stronger-than-expected US ISM Services data, the USD softened into the New York session following reports that Iranian officials may be open to diplomatic discussions. As risk sentiment improved later in the day, commodity currencies recovered, with AUD/USD remaining volatile but holding near the top of its intraday range.
The US Dollar Index traded modestly lower, while AUD/USD fluctuated within its recent range and found buying interest on dips below the psychological 0.7000 level. NZD/USD also pushed higher, and both EUR/USD and GBP/USD rebounded strongly into Europe’s morning trade after early weakness. USD/JPY briefly dipped before stabilising mid-range, and USD/CAD eased as the greenback softened broadly.
In rates markets, US Treasury yields edged slightly higher across the curve, while Australian government bond yields moved marginally lower.

General Market

Wall Street

  • S&P 500 +0.9% (6881)
  • Dow Jones +0.6% (48,800)
  • Nasdaq +1.6% (22,874)
  • VIX -12.5% (20.63)

Asia-Pacific

  • ASX 200 -1.9% (8,901)
  • Nikkei -3.6% (54,246)
  • Shanghai Comp -1.0% (4,082)
  • Hang Seng -2.0%

Europe

  • DAX +1.7% (24,205)
  • FTSE 100 +0.8% (10,568)
  • CAC 40 +0.8% (8,168)

Headlines to Watch

Geopolitics

  • NATO intercepts Iranian ballistic missile near Turkish airspace.
  • Reports of US submarine sinking Iranian warship.
  • Drone strike on Maltese-flagged vessel in Strait of Hormuz.

United States

  • ADP Employment: 63k (above 50k expected).
  • ISM Services: 56.1 (stronger than forecast).
  • Markets showed limited reaction to data releases.

Australia

  • Q4 GDP +0.8% q/q (as expected).
  • Growth driven largely by government spending and inventories.
  • Private sector momentum remains modest.
Currency PairMid-market Rate
AUD/USD0.7075
AUD/NZD1.1915
AUD/JPY111.15
AUD/CNY4.8869
AUD/EUR0.6081
AUD/GBP0.5293
AUD/HKD5.5310

 

 

 

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