Forex Today: US Dollar rebounds as US-Iran tensions flare up
Here is what you need to know on Friday, July 17:
The US Dollar stays resilient against its rivals early Friday as investors assess the latest headlines coming out of the Middle East. In the second half of the day, Export Price Index, Import Price Index and Housing Starts data for June will be featured in the US economic calendar. Additionally, the University of Michigan (UoM) will publish the preliminary Consumer Sentiment Index for July.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.03% | 0.13% | 0.02% | -0.04% | 0.22% | 0.13% | 0.04% | |
| EUR | -0.03% | 0.10% | -0.02% | -0.11% | 0.20% | 0.10% | 0.00% | |
| GBP | -0.13% | -0.10% | -0.13% | -0.20% | 0.09% | 0.02% | -0.10% | |
| JPY | -0.02% | 0.02% | 0.13% | -0.06% | 0.22% | 0.11% | 0.03% | |
| CAD | 0.04% | 0.11% | 0.20% | 0.06% | 0.29% | 0.18% | 0.09% | |
| AUD | -0.22% | -0.20% | -0.09% | -0.22% | -0.29% | -0.11% | -0.20% | |
| NZD | -0.13% | -0.10% | -0.02% | -0.11% | -0.18% | 0.11% | -0.09% | |
| CHF | -0.04% | -0.00% | 0.10% | -0.03% | -0.09% | 0.20% | 0.09% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Following a two-day slide, the USD Index gathered recovery momentum on Thursday and closed the day in positive territory. Upbeat Initial Jobless Claims data helped the USD gather strength, while the currency also benefited from the risk-averse market atmosphere.
The United States (US) carried out strikes for the sixth night in a row, focusing on Southern Iran. According to Al Jazeera, officials in southern Iran’s Bandar Abbas reported that civilian infrastructure, including power facilities and a train station, has been hit. In an exclusive article published late Thursday, Reuters said that Iran has asked Yemen’s Houthi militia to stand ready to close the Red Sea oil route if the US strikes Iranian power infrastructure, posing a potent new threat to global energy supplies.
The USD Index clings to marginal gains at round 100.80 in the European morning, while US stock index futures lose between 0.8% and 1.5% on the day, pointing to an intensifying flight to safety.
Jefferson flags policy dilemma but keeps Fed stance steady for the Dollar
Meanwhile, Federal Reserve (Fed) Vice Chair Philip Jefferson delivered a moderately hawkish but balanced message late Thursday, with a 6/10 FXS Speechtracker score only slightly above the 5.8/10 historical average, signaling continuity rather than a clear hawkish or dovish shift. The emphasis that current policy should both support the job market and allow inflation to resume its decline toward 2%—while warning that a failure of inflation to cool would warrant reconsidering the stance—underscores a data-dependent posture amid overlapping energy, tariff, and AI-related shocks. The discussion of AI as a potential source of either upward or downward pressure on inflation, and of the Middle East conflict’s muted demand impact given the US’ net oil exporter status, highlights a nuanced risk-balancing approach rather than an imminent policy pivot.
EUR/USD struggles to stage a rebound following Thursday's decline and stays below 1.1450 in the European morning on Friday.
GBP/USD stays on the back foot and declines toward 1.3450 after losing nearly 0.5% on Thursday.
USD/JPY fluctuates in a very tight range below 162.50 on Friday. Japan’s Finance Minister Satsuki Katayama repeated on Friday that the authorities are ready to act on currency moves whenever necessary.
Gold (XAU/USD) came under heavy bearish pressure following a two-day rebound and lost about 2% on Thursday. XAU/USD finds it difficult to recovery early Friday and trades in a narrow band below $4,000.
Risk sentiment FAQs
What do the terms"risk-on" and "risk-off" mean when referring to sentiment in financial markets?
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
What are the key assets to track to understand risk sentiment dynamics?
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
Which currencies strengthen when sentiment is "risk-on"?
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
Which currencies strengthen when sentiment is "risk-off"?
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.