The US dollar and other safe-haven assets began Monday with a powerful surge as the Iran conflict prompted investors to shun riskier positions.
The pound hit multi-week lows against the euro and the US dollar before bouncing higher across the afternoon’s trading. The UK’s FTSE 100 stock index meanwhile endured its worst session since November on a day of anxiety and uncertainty.
Iran continued to trade strikes with the United States and Israel as President Trump warned ‘the big wave’ of assaults was yet to come. It certainly felt big enough as violence continued across the region. Overnight, the US embassy in Riyadh was struck with drones. Lebanon became a particular target of fresh attacks, underscoring just how quickly things could spiral into a regional conflict.
Oil was very much in the spotlight to start the week. Sure enough, Brent crude and other major indexes spiked by as much as 7%. More jitters emerged after Saudi Arabia closed an oil refinery and Qatar was forced to stop production at the world’s largest liquified natural gas plant after air strikes. Sources in the Iranian leadership also claimed they would set fire to any ship attempting to cross the vital Strait of Hormuz.
Back home, chancellor Rachel Reeves will make the short journey across Whitehall to deliver the spring statement around lunchtime. After November’s drama and a desire to project stability and competence, few economists expect many fireworks, but we’ve certainly been surprised before.
Economic news played second fiddle to these rather significant developments to start the week. We also heard that American manufacturing outperformed expectations in February.
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