In world markets, the dollar strengthened against a basket of currencies last week for the second week in a row, as the crisis in the Middle East prompted investors to seek safer havens for their capital.
The dollar index, which shows the value of the US against the six most important world currencies, rose 1.6 percent last week, to 100.49 points.
At the same time, the dollar strengthened by 1.7 percent against the European currency, so the exchange rate of the euro slipped to 1.1415 dollars. The American currency also strengthened against the Japanese one, by 1.2 percent, so the price of the dollar reached 159.70 yen.
Investors are risk averse
Investors are not inclined to riskier investments because oil prices have jumped more than 35 percent in the last two weeks, since the US and Israeli attacks on Iran began.
Although US President Donald Trump has been saying for days that the US and Israel have won, the crisis in the Middle East is not abating.
Iran continues to fire missiles at Israel and neighboring countries and does not allow tankers to pass through the Strait of Hormuz, which has rattled the oil market.
A strong and prolonged rise in oil prices could have a very negative impact on the economies of the Eurozone and Japan, which are heavily dependent on oil imports, while the US economy could fare somewhat better because the US is a net oil exporter.
“Investors are reducing cross-border exposure and moving capital to safer havens, while they are under pressure from the currencies of countries that are net energy importers,” explains Karl Schamotta, strategist at Corpay.
