Notice Mr Market’s reaction to the sudden spike in geopolitical risk premium as war clouds gather over Iran once again; especially in traditional safe havens. Brent crude jumped 1.5 percent (weekly high) when CNN revealed a US intel leak about an imminent Israeli attack on Iran’s nuclear facilities, and investors rushed to rock solid safe havens like the Swiss franc and Japanese yen. Gold also rallied and reclaimed $3,300.

But, once again, Big Money didn’t turn to the dollar in a time of turmoil. That’s one more chip of US economic/financial credibility falling away after Trump’s tariff madness triggered a historic loss of confidence in the reserve currency.

“The US dollar has of course lost its lustre as the undisputed safe reserve asset,” the FX strategy head at Westpac Banking Corp told Bloomberg. “These periodic flareups are going to show up more forcefully in alternatives”.

It’s hard to imagine a more destabilising global scenario than an all-out Israel-Iran war right now, except perhaps an all-out war in the subcontinent. But could it be that this perfect........

© Business Recorder