The dollar rose nearly 0.9% on Friday, its biggest one-day gain in a month, as investors turned to safe-haven assets after Israel launched strikes in Iran, prompting Iranian retaliation.
Israel said it hit military targets across Iran, while Iran responded with drone attacks. The Swiss franc and Japanese yen initially gained before losing ground to the dollar.
U.S. President Donald Trump called for a deal with Iran, warning of more severe future strikes.
Talks between U.S. and Iranian officials on Iran’s uranium enrichment are set to resume Sunday in Oman. Israel’s UN ambassador said the country acted independently.
The dollar index rose 0.85% to its highest since May 12. The euro fell 0.7% to $1.1494, the yen dropped to 144.43 per dollar, and the Swiss franc weakened to 0.8147.
U.S. Treasury yields dropped, with the 10-year note falling as much as 4.7 basis points to 4.31%, a one-month low. Gold climbed 1.7% to $3,444 an ounce, and crude oil jumped over $5 a barrel on supply concerns.
Despite Friday’s gains, the dollar index is set for a weekly loss of nearly 1%, its largest in more than three weeks. The risk-off mood also hit cryptocurrencies, with bitcoin down 1% to $105,052 and ether falling 4% to $2,538.
Markets await rate decisions next week from the U.S. Federal Reserve, Bank of Japan, and Bank of England. Inflation data this week supported expectations of future rate cuts, though tariffs could raise prices.
