Dollar makes a U-turn

Just when the market thought the US dollar would break down, it reversed. The critical catalyst was Iran's direct attack on Israel. The US dollar index (DXY) rebounded sharply from multi-month lows following Iran's unprecedented missile attack on Israel on Oct. 1, 2024. This caught financial markets off guard, triggering a flight to safety. The dollar's strength was further bolstered by strong US jobs numbers and recent presidential surveys showing Trump overtaking Harris.

- WILSON SY

Markets blindsided by Iran's bold move

Unlike Iran's missile and drone attack on Israel last April 14, 2024, which was largely telegraphed, this assault blindsided the markets.

Previously, Iran fought an indirect war using its proxies – Hamas in Gaza, Hezbollah in Lebanon and the Houthis in Yemen. The market's complacency was shattered as Iran took direct action on its long-standing adversary, forcing a rapid repricing of risk across global financial assets.

IRGC unleashes missile barrage

Iran's Islamic Revolutionary Guard Corps (IRGC) launched approximately 200 ballistic missiles at Israel, including the debut of the "Fattah-2" hypersonic medium-range ballistic missile. The attack was framed as retaliation for Israeli strikes in Gaza and Lebanon, as well as the assassinations of key figures in Hezbollah, Hamas and the IRGC.

Escalation fears mount