Dollar Surges, Crypto Drops on New Threats

Traders are stepping into Thursday after a volatile overnight session, driven once again by geopolitical developments.

Late in the US session and into the Asian trading hours, comments from Donald Trump shifted sentiment sharply. His statement about potentially hitting Iran “extremely hard” was seen as a clear escalation. This came as a surprise, especially after earlier expectations that tensions might ease.

The market reaction was immediate and mostly aligned with a risk-off scenario, although not entirely typical.

Equity indices moved lower, giving back part of their earlier weekly gains. While they are still above the levels from the beginning of the week, the momentum has clearly weakened.

On the currency market, the biggest winner is the US dollar. After a period of weakness, the dollar reversed sharply and is now the strongest major currency. The Japanese yen is also gaining, but its strength is much more limited compared to the dollar.

Interestingly, precious metals are not behaving like classic safe havens this time. Both Gold and Silver are moving lower despite rising geopolitical risk. This divergence suggests that liquidity and positioning may be playing a bigger role than traditional safe-haven flows.

Cryptocurrencies are also under pressure. Bitcoin and Ethereum dropped sharply from their weekly highs and are now approaching weekly lows. This highlights how sensitive risk assets remain to sudden changes in sentiment.

Overall, the market tone has clearly shifted. What looked like a move toward stabilization earlier in the week has turned back into uncertainty.

With the weekend approaching, the risk of holding positions increases. Given how often major developments have been announced outside market hours recently, caution remains key.