Investing.com - The Japanese yen was the early beneficiary of Iran’s decision to fire several missiles at military bases in Iraq which were hosting U.S. troops. Investors chose this currency as a safe haven in case this move represented a dramatic escalation of the recent tensions in the region.
The yen soared to a three month high against the U.S. dollar, with USD/JPY falling as low as Y107.64, before rebounding as investors breathed a sigh of relief that no further action followed.
Moves in the widely traded EUR/USD pair were more subdued, with the euro gaining against the dollar early. EUR/USD dropped as low as $1.1127, but has since rebounded.
Elsewhere, GBP/USD was trading basically flat, while EUR/GBP was a touch lower.
Helping the move to the more relaxed tone were reports that there were no American casualties from the missile attacks as well as tweets from Iran’s foreign minister who indicated that his country did not seek an escalation of the conflict and U.S. President Donald Trump who stated that “all is well.”
This bout of military action was prompted by the killing of a key Iranian military adviser Qassem Soleimani by a U.S. airstrike last week, and investors will now wait for the promised press conference from President Trump to gauge whether he sees the need for a response to the Iranian missile attacks, or whether he seeks to deescalate the heightened tension.