Dollar Weakens as Traders Look for Safe Havens

The U.S. dollar was on the defensive during the Asian trade session on Monday. Safe haven currencies were in demand as traders digested this weekend’s attack on Saudi Arabian energy infrastructure carried out by Iranian backed Yemen Houthi rebels.

This attacked disrupted global oil supply and increased tensions in the Middle East.

The Canadian dollar gained half a percent against the U.S. dollar to trade at 1.3224. The USD/NOK currency exchange rate fell 0.6 percent to trade at 8.9363.

Canada and Norway are big oil exporters and their currencies tend to shadow the price of oil.

The benchmark USD/JPY currency exchange rate fell 0.3 percent as did the USD/CHF Forex market.

The dollar index, which measures the U.S. currency in a basket against six other Forex units, was down 0.2 percent to trade at 98.053.

Forex Traders Support Safe Haven Assets other than the Dollar after the Attack in Saudi Arabia

Oil prices surged over 15 percent this morning after the Houthi attacked two plants in Saudi Arabia. This includes the world’s largest petroleum process plant at Abqaiq. This attack was a blow that stopped five percent of the world’s oil supply.

Yemen’s Iranian supported Houthi group has taken responsibility for these attacks and the United States is blaming Iran fully.

These attacks all but erased the risk on sentiment seen last week that boosted equities, oil and riskier asset classes. In more saber rattling, prompted U.S. President Donald Trump tweeted that the United States was “locked and loaded.” This sent tensions even higher as the region is fearing a military response that could disrupt global oil supplies even further.

This is likely to dampen risk sentiment through the day as traders look for safe haven asset classes like gold, the yen and Swiss franc.