Geopolitics & Energy: Risks remain elevated despite delayed Iran strike
Market sentiment continued to be driven by developments surrounding Iran and global energy supply concerns. Although Donald Trump announced a delay in plans for military action against Iran, investors remain cautious as tensions in the Middle East are far from resolved.
Goldman Sachs warned that a new energy shock could place significant pressure on the European economy while simultaneously driving further strength in the US dollar under a defensive market environment. This suggests markets are still pricing in the possibility that geopolitical risks could escalate again at any moment.
USD: Continues to benefit from defensive sentiment
The US dollar maintained relatively strong momentum as investors returned to safe-haven assets amid ongoing geopolitical uncertainty and persistent energy risks. The “higher for longer” policy stance from the Federal Reserve continues to support the dollar, particularly as global growth momentum remains uncertain.
Goldman Sachs also noted that any renewed energy shock could further strengthen the USD due to its role as a global defensive asset.
Asia FX & Yuan: Pressured by Iran tensions and weak China data
Asian currencies weakened as tensions involving Iran continued to reduce market risk appetite. The Chinese yuan declined after disappointing Chinese economic data raised concerns about the recovery outlook for the world’s second-largest economy. This suggests markets are now focusing not only on geopolitical tensions but also on slowing growth signals across Asia.
JPY: Japan signals room for further intervention to support the yen
Japanese officials stated that there is still ample room for currency intervention if needed to support the yen. This indicates that authorities remain highly focused on exchange rate movements as the yen continues to face pressure from the large interest rate gap with the United States. The statement keeps markets highly sensitive to the possibility of direct intervention by Japan in the near future.
GBP: British pound rebounds slightly but remains near April lows
The British pound posted a modest recovery during the session but remained close to its lowest levels since April due to ongoing political pressure in the United Kingdom. Investors remain cautious on GBP as the country’s political and economic outlook continues to face uncertainty. As a result, GBP remains one of the weaker major currencies relative to the USD in the current market environment.
Gold & Oil: Brent rises above 111 USD while gold falls toward 4548 USD
Brent crude oil has climbed sharply to around 111 USD per barrel, signaling that energy markets are still heavily pricing supply risks despite the temporary delay in military action against Iran. The fact that Brent remains firmly above the key psychological level of 100 USD per barrel shows that investors have not yet removed geopolitical risk premium from oil markets, while concerns about inflation returning through energy prices continue to rise.
Meanwhile, gold prices (XAU/USD) corrected lower toward the 4548 USD area, falling more than 3% during the latest session. This reflects partial unwinding of safe-haven positioning after Trump signaled a delay in military escalation with Iran. However, gold remaining at historically elevated levels indicates that defensive sentiment has not disappeared entirely.
Market Overview
The Forex market remains in a defensive phase as the USD continues to benefit from energy risks and geopolitical uncertainty. Brent oil rising above 111 USD highlights persistent supply concerns, while gold’s pullback toward 4548 USD suggests safe-haven demand has eased slightly but remains elevated overall. Meanwhile, Asian currencies and GBP continue to struggle amid slowing global growth expectations and ongoing uncertainty.
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