Forexlive’s Americas FX news wrap captures significant movements and heightened tensions in the Middle East.

Senator Marco Rubio’s warning about potential Iranian attacks on Israel, absent any last-minute developments, has stirred significant concern. Rubio’s track record of live-tweeting detailed information about Russia’s actions in Ukraine during the initial stages of the conflict suggests access to high-level US intelligence, intensifying market apprehensions.

Initially, moderate worries escalated into full-blown fear in the equity market, with the Nasdaq plummeting by 2%. Concurrently, the US dollar strengthened across the board, while US 10-year yields declined.

Later in the day, Hezbollah launched a limited rocket attack against Israel, prompting a partial relief in the market, as some interpreted it as potentially the extent of the threat. Nevertheless, the market remains tense, with uncertainty lingering over developments during the weekend or into the next week.

The volatility also impacted gold, which surged to a record high amidst the turmoil. However, as risk sentiment deteriorated, profit-taking ensued, leading to a steep $100 drop and leaving a significant reversal on the price chart. Attention now turns to potential buying activity from Chinese investors at Monday’s open, to gauge whether they perceive the dip as an opportunity to enter the market once again.

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