FOREX-Dollar jumps as Trump pledges more Iran strikes
By Jiaxing Li
HONG KONG, April 2 (Reuters) - The dollar rose sharply on Thursday after U.S. President Donald Trump's address on Iran shattered hopes for a swift end to the conflict, sending investors towards safe-haven assets as oil prices jumped and stocks tumbled.
In an eagerly anticipated address, Trump vowed more aggressive strikes on Iran in the next two to three weeks, offering no concrete timeline to open the Strait of Hormuz or end the war that has rattled investors and roiled markets.
Investors were quick to sell risky assets such as stocks and buy the U.S. dollar, pushing the yen, euro, and sterling lower.
The dollar index =USD, which measures the greenback against a basket of currencies, climbed 0.53% to 100.09 as the safe-haven trade came back on.
Thursday's advance wiped out most of the greenback's declines from the past two days amid earlier optimism about de-escalating the Iran war, putting it on track for another winning week.
Stocks slid and oil prices surged, with Brent crude futures LCOc1 rising more than 6% to $108 per barrel, after Trump's address sparked fresh concerns about sustained disruptions.
"Trump's comments failed to reassure markets ... markets are starting to realize that the war will probably escalate further from here before de-escalating," said Carol Kong, a currency strategist at Commonwealth Bank of Australia.
"The dollar can definitely increase further from here against all the major currencies" as markets wake up to the fact that the global economy will slow down materially, she added.
The euro fell 0.51% to $1.1531 EUR= and sterling slid 0.68% to $1.3216 GBP=D3, both giving up some recent gains.
The risk-sensitive Australian dollar AUD=, which is commonly seen as a barometer of global growth expectations, fell 0.69% to $0.6881.
The Japanese yen traded 0.5% weaker at 159.64 per dollar JPY=, nearing the psychologically important 160 level that is viewed as the line in the sand for intervention by Japanese authorities.
Trump's comments also sent U.S. Treasury yields higher on growing fears that inflation from higher oil prices would close the door to rate cuts.
That sets the stage for Friday's U.S. non-farm payrolls report. The market is looking for a 60,000 rise in jobs for March, according to the median estimate of economists polled by Reuters. USNFAR=ECI
"Another miss could rattle the markets and crank the volume up on the chorus warning about stagflation," said Kyle Rodda, senior financial market analyst at Capital.com.
"The markets could be extra choppy going into the Easter long weekend."
