SINGAPORE- Japanese yen performed well as gold inched higher on Wednesday after Iran attacked base of Iraq hosting US armies. Such tension brought in fears of wider political conflict between Iran and United States driving investors run to safety.
Anonymous US officials disclosed that rockets were fired at several target points including Iraq’s al Asad airbase that holds US military troops. In line, the Pentagon said that rockets were traced from Iran while Iran-based news agency Mehr stated that the strike was conducted by Iran’s Islamic Revolutionary Guard Corps.
Missile attacks followed hours after the funeral service of Iran’s top commander, Qassem Soleimani, whose death from US-conducted strike last week sparked Middle East tensions as it raked in fears of larger conflagration.
The safe-haven yen increased 0.6% to a three-month high and was last quoted at 107.74 yen against dollar.
While shares slipped, gold soared $18 to $1,592.50 per ounce, highest record since 2013. Oil negated losses mainly from anxiety that ongoing tensions between United States and Iran could create disruption in worldwide supplies.
“It’s quickly put the markets into risk-off,” said Ashley Glover of CMC Markets
“Now it’s going to be a wait-and-see mode initially,” he said as traders wait for United States’ next action.
“It’s only early Asian trading at the moment, so there’s a lot more liquidity to come on, and once we see what further retaliation there is,” he added.
There is an ambiguity on damage and casualty level at the target point.
U.S. President Donald Trump was informed already regarding the attack and is now closely studying the situation, according to White House spokeswoman Stephanie Grisham.
U.S. Defense Secretary Mark Esper said that the United States needs to be alert for possible retaliation of Iran over the death of Iran’s Quds Force commander.
Soleimani was responsible for structuring Iran’s campaign of eradicating US troops out of Iraq and was also the figure behind Tehran’s series of proxy troops across the Middle East.
Tehran is now assessing ways on how to avenge Soleimani’s death, a senior Iranian official said. Other pivotal figures said that Islamic Republic will deliver the same intensity and is carefully assessing where and when to execute the attack.
Safety blows drove Swiss franc marginally higher with 0.3% increase and was quoted at 0.9674 francs per dollar. This enforced dollar performance completely recuperating overnight from positive US records.
The dollar increased 0.3% on the New Zealand dollar as it reached its three-month high against Australian dollar. The Aussie continues to dwindle as market appetite dimmed due to concern that wildfires may lead to rate cut.