Australian Dollar Drops as Israel-Iran Tensions Worry Markets
The Australian dollar fell sharply after news that Israel attacked some of Iran’s nuclear sites. This raised fears that the fight could grow and hurt peace in the Middle East. Because of this, investors moved their money from risky places to safe ones. The Aussie dollar dropped over 1% on Friday, going below 0.6500 against the US dollar.
When investors get scared, they buy safer things like the US dollar, Japanese yen, and Swiss franc. Gold prices jumped to their highest since late April, above $3,400 per ounce. More people also bought US government bonds, pushing their interest rates down.
Oil prices rose fast too. Brent crude oil jumped nearly 10% for a short time. Traders worry the conflict could stop oil shipments through the Strait of Hormuz, which is a key oil route. This could mean higher petrol costs in Australia soon.
Stock markets reacted too. Futures for big US indexes like the S&P 500, Nasdaq, and Dow dropped. The euro lost recent gains and slipped below 1.1550 against the US dollar. Now, traders wait to see how central banks and new inflation data will affect markets.
Impact: If tensions continue, fuel prices may rise and global markets may stay unstable. Investors may avoid riskier currencies like the Australian dollar for some time.