Overview
- U.S. forces launched consecutive nights of strikes on Iran after attacks on commercial vessels, and Iran reported casualties and say it struck U.S. bases in the Gulf in retaliation, ending the short ceasefire.
- Global oil prices jumped about 5–6 percent on the escalation and then partially retraced during risk rallies, a swing that has raised near‑term inflation concerns for energy‑importing economies.
- Investors alternated between moving into the U.S. dollar and buying risk assets, producing large intraday reversals that left the dollar little changed on Thursday but kept safe‑haven demand and swap‑market odds for Fed tightening higher at times.
- Major currencies were volatile: the yen weakened toward four‑decade lows near ¥162 per dollar with intervention risk elevated, while the rupee showed sharp moves and later modest recovery consistent with suspected Reserve Bank of India dollar sales.
- Traders and policymakers are watching central bank calendars and data closely because sustained higher oil and yields could prompt policy shifts or targeted FX interventions that would amplify cross‑asset volatility and raise costs for households and importers.