We’ve closely monitored the ongoing Middle East conflict and how it affects global markets. The region’s escalating tensions have sent shockwaves through various sectors. The conflict has led to fluctuating oil prices and volatility in currency and cryptocurrency markets. So, as the situation evolves, it’s important to understand how these developments influence our financial landscape.
Yesterday, we witnessed significant shifts in market trends. The intensity of the Middle East conflict has created a sense of uncertainty. In this article, we will provide an update on the current state of affairs as of August 7, Wednesday. And delve into the specific effects on oil prices, the US dollar, cryptocurrencies, and other major markets.
What’s oil like today?
Oil prices moved higher on Wednesday. Prices were likely driven by growing concerns over increasing tensions in the Middle East. Despite this upward movement, Brent crude remained near seven-month lows.
This is primarily due to fears over weak global demand. And concerns about the US going into a recession. The Middle East conflict plays a huge role in dictating the mood within the oil market. The possibility of the conflict escalating and threatening oil production in the region has lent some support to prices since Tuesday.
As of 0823 GMT, Brent crude futures had risen by 45 cents, or 0.6%, reaching $76.93 a barrel. Similarly, U.S. West Texas Intermediate (WTI) crude saw an increase of 47 cents, also 0.6%, bringing it to $73.67. Earlier in the week, both Brent and WTI futures experienced significant declines. Brent hit its lowest point since early January, and WTI touched its lowest since February.
How’s the Financial Market Reacting?
Gold prices went up a bit on Wednesday because people are looking for safe investments and think the U.S. Federal Reserve might lower interest rates by September. However, a stronger U.S. dollar and higher Treasury yields kept the increase small.
By 0936 GMT, spot gold had risen 0.2% to $2,393.66 per ounce after falling for four days straight. U.S. gold futures also went up 0.1% to $2,434.00. On Monday, prices dropped as much as 3% because of a global sell-off triggered by recession fears in the U.S. The dollar moved away from a seven-month low, and the 10-year U.S. Treasury yield increased, as fears about a quick U.S. recession seemed overblown.
How’s Crypto Faring?
Bitcoin is on the rise again and is currently trading at $57,168.44, which marks a 3.51% increase in the last 24 hours. This means that the price of Bitcoin has gone up by a little over 3% in just one day, showing a positive trend.
Similarly, Ethereum has experienced a boost in sentiment, or how investors feel about it, in the last 24 hours. This improved sentiment indicates that more people are feeling optimistic about cryptocurrencies following the recent bloodbath.
What’s the Latest on the Middle East Conflict?
The Wall Street Journal, citing two unnamed US sources, claims Iran is currently preparing for its much-anticipated attack on Israel. This is in response to the assassination of Hamas leader Ismail Haniyeh in Tehran and senior Hezbollah official Fuad Shukr in Beirut last week.
Reports also state that President Joe Biden is working on countering a possible Iran attack on Israel. The US is concerned that an Iranian attack could be supported by strikes from Hezbollah and other groups allied with Iran. As of Wednesday, there’s no clarity on the nature and timing of any attack on Israel.
Disclaimer
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