Attack on Israel impacts financial markets

Note: This section contains information in English only.
Source: Dukascopy Bank SA
The events that unfolded during the weekend in Israel and Gaza have caused a major impact on the financial markets, as soon as trading had resumed. The Israeli currency hit an 8-year low. Oil prices surged. The price for gold and other safe haven assets started to rise.

The USD/ILS currency rate experienced a fall of the Israeli currency due to the fact that many of the workforce have been called up to the defence forces that will stall the economy and with it exports. This in turn will cause lower global demand for the currency. The USD/ILS currency rate surged by 825 points or 2.14% during the first hours of Monday's trading.



However, the central bank of Israel has already reacted to the event. The Bank of Israel is selling $30 billion of its reserves, buying up the Shekel. By the start of Monday's 09.10.2023 US trading hours, the USD/ILS appeared to have reversed its direction.

Last week, crude oil price benchmarks broke their summer channel up patterns and were expected to continue to decline. The reason for the drop was low gasoline demand from the US consumers. The start of the war has erased a portion of prior losses, as military actions are not only set to consume large quantities of oil, but any destabilization in the Middle East is seen as a risk to the region's oil production.

US light crude has surged by 4.30%, compared to Friday's close. Brent Crude oil had surged as much as 5.23%, before slightly declining.





In the meantime, safe haven assets have reportedly surged. Most of the world considers Gold, the Japanese Yen and the Swiss Franc as safe haven assets.

Gold has surged less than 1.00%. However, it has ended its sideways trading by reaching the 1,850.00 price per ounce.



Meanwhile, the Japanese Yen has not reacted to the events. It is assumed that it is due to the recent issues with the currency and the actions and comments made in regards to its weakness by the Bank of Japan and the government of the country.



The same opinion is applied to the Swiss Franc. The USD/CHF currency pair was more volatile during the Friday's employment release than the current events.

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