Economic data shows that as tensions in the Middle East escalate, market risk aversion has driven the dollar to significant gains on Friday, expected to mark the largest single-day increase in nearly a month. Following Israel's military actions against Iran and the latter's retaliatory responses, investors have flocked to purchase dollar assets. Notably, although traditional safe-haven currencies like the Swiss franc and yen initially strengthened, the dollar quickly reversed the situation, reestablishing itself as the preferred safe-haven asset during times of global political instability or financial market turmoil. On that day, the dollar appreciated nearly 0.9% against a basket of major currencies, with notable rises against the euro, pound, and Australian dollar. The dollar index rose 0.85%, expected to achieve its largest single-day increase since May 12. Market analysts believe the dollar is returning to its traditional safe-haven role but also caution investors that if signs of easing emerge in the Middle East situation over the weekend, this upward momentum may be difficult to sustain.
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Economic data shows that as tensions in the Middle East escalate, market risk aversion has driven the dollar to significant gains on Friday, expected to mark the largest single-day increase in nearly a month. Following Israel's military actions against Iran and the latter's retaliatory responses, investors have flocked to purchase dollar assets. Notably, although traditional safe-haven currencies like the Swiss franc and yen initially strengthened, the dollar quickly reversed the situation, reestablishing itself as the preferred safe-haven asset during times of global political instability or financial market turmoil. On that day, the dollar appreciated nearly 0.9% against a basket of major currencies, with notable rises against the euro, pound, and Australian dollar. The dollar index rose 0.85%, expected to achieve its largest single-day increase since May 12. Market analysts believe the dollar is returning to its traditional safe-haven role but also caution investors that if signs of easing emerge in the Middle East situation over the weekend, this upward momentum may be difficult to sustain.