13/03/2026 - 08:19 UTCThe US Dollar Index (USDX) exhibited notable strength on Thursday, March 12, 2026, climbing 0.5% to reach its highest level since late 2025. This upward momentum was largely fueled by a safe-haven flight as geopolitical tensions intensified in the Middle East, coupled with US economic data that showed resilient housing starts and lower-than-expected jobless claims. While the Greenback softened slightly in early Friday trading as participants awaited the latest PCE inflation report, the previous day's gains reflected a market leaning into the dollar's interest rate differentials and its status as a hedge against global instability.
Gold, however, faced a more difficult session on Thursday, with prices retreating by 0.71% as it struggled against the headwinds of a surging dollar and rising Treasury yields. Despite the ongoing conflict involving the US, Israel, and Iran providing a structural floor for the metal, the 10-year Treasury yield's climb to a five-week high increased the opportunity cost for non-yielding assets. Bullion saw significant volatility throughout the day, briefly touching intraday highs before sellers stepped in, though it continues to attract dip-buyers who view the current geopolitical climate as a long-term catalyst for higher prices.
Crude oil was the standout performer of the day, with prices skyrocketing 4.47% as the market reacted to what the International Energy Agency described as the largest supply disruption in history. The effective closure of the Strait of Hormuz and reports of tanker strikes sent Brent and WTI crude toward the $100 mark, completely overshadowing a record-breaking release of 400 million barrels from global emergency reserves. With Iran’s leadership maintaining a defiant stance on maritime blockades and President Trump prioritizing regional security over price stability, energy markets remain on edge regarding a potential inflation shock and a prolonged squeeze on global fuel stocks.
Friday morning saw a wave of red across Asian equity markets as geopolitical tensions and inflationary fears dampened investor appetite. As of 07:47 AM GMT, regional benchmarks struggled significantly, with the Japan 225 in Japan leading the retreat by dropping 1.99%. South Korea’s Korea 200 followed suit with a 0.28% decline, reflecting broader concerns that the ongoing conflict in the Middle East and its impact on oil prices will force central banks to maintain restrictive monetary policies. The sentiment was further soured by a weak lead from Wall Street, where the prospect of energy-driven inflation has clouded the timeline for potential Federal Reserve rate cuts.
In Greater China, the downward pressure was slightly more contained but still evident as the Shanghai Composite (China SSE) fell 0.81%, the Shenzhen Component (China SZSE) dropped 0.69%, and the Hang Seng Index (Hong Kong 50) slipped 0.28%. While some analysts suggest China’s strategic oil reserves and shift toward renewables provide a buffer against supply shocks, the region remains hyper-sensitive to the risk of a prolonged disruption in the Strait of Hormuz. This collective downturn underscores a difficult week for Asian markets, which are grappling with the dual pressures of rising crude costs and the likelihood of "higher-for-longer" interest rates across major economies.
Investors are closely watching upcoming financial results from Adobe as the company, which saw its stock decline by 1.29%, navigates growing concerns regarding the influence of artificial intelligence on the software industry. This uncertainty has weighed heavily on the S&P 500 Information Technology index, of which Adobe is a major member; the sector has retreated by over 3% this year, a sharp contrast to its 24% return in 2025. Adobe's own shares, encompassing products such as InDesign and Acrobat, have mirrored this broader struggle with a year-to-date drop exceeding 17%. Despite the market's current skepticism, the company remains optimistic about its monetization strategy, with fiscal 2026 projections for revenue up to $26.10 billion and earnings per share reaching as high as $23.50. In a separate sector, shares of discount retailer Dollar General also faced pressure, falling 6.06% after the company issued an annual comparable sales forecast that failed to meet Wall Street’s expectations.
Market attention today shifts toward a critical slate of U.S. economic data that will likely set the tone for the coming weeks. Investors are closely monitoring the Core PCE Price Index (MoM), expected to hold steady at 0.4%, as it remains the Federal Reserve's preferred measure for gauging underlying inflation. Simultaneously, the Preliminary GDP (QoQ) is forecasted to remain at 1.4%, providing a second look at economic growth and resilience. Rounding out the afternoon at 4:00 PM, the JOLTS Job Openings report—expected to rise to 6.76M from a previous 6.54M—will offer vital clues regarding the current demand for labor and the overall health of the employment market.
The EUR/USD pair extended its losses during early European trading on Friday, slipping below the 1.1500 level and reaching prices last seen in November 2025. The move comes as the US Dollar gains strength amid growing risk aversion across global markets.
Geopolitical tensions in the Middle East remain elevated, with the conflict involving Iran showing no signs of easing. Reports indicate that Iranian forces continue to keep the Strait of Hormuz closed, a key passage for global energy shipments.
Iran’s newly installed Supreme Leader, Mojtaba Khamenei, said the strait should remain shut as a strategic tool to exert pressure on adversaries. He also stated that Iran intends to avenge what it calls the blood of its martyrs and warned that further attacks are “inevitable.”
Later on Friday, market participants will also focus on the release of the US Personal Consumption Expenditures (PCE) Price Index report for January, the Federal Reserve’s preferred gauge of inflation, which could influence expectations for the future path of US monetary policy.
Gold prices moved lower on Friday, slipping back below the $5,100 level during the European session as a stronger US Dollar and reduced expectations for Federal Reserve rate cuts offset ongoing geopolitical tensions.
Earlier in the Asian trading session, the precious metal attracted dip-buying and briefly snapped a two-day losing streak. Persistent geopolitical uncertainty in the Middle East supported demand for safe-haven assets, allowing Gold to rebound from the lower boundary of its trading range that has held for roughly the past two weeks.
Tensions in the region remain elevated following comments from Iran’s new Supreme Leader, Mojtaba Khamenei, who warned in his first public statement that US military bases in the region should be closed immediately or risk being targeted. He also indicated that attacks on US bases could continue, despite Iran’s stated willingness to maintain goodwill with neighboring countries.
Market attention now turns to the upcoming release of the US Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation gauge.
Despite the persistent geopolitical risks that could support safe-haven demand, Gold appears on track to post its second consecutive weekly decline. With mixed fundamental drivers currently at play, traders may remain cautious about placing aggressive directional bets in the near term.
Oil prices were on track to post strong weekly gains as of Friday, even as the United States attempted to ease supply pressures by granting a temporary license allowing countries to purchase Russian oil and petroleum products currently stranded at sea.
The US Treasury issued a 30-day waiver permitting the purchase of Russian oil shipments already in transit. Treasury Secretary Scott Bessent described the move as an attempt to help stabilize global energy markets that have been shaken by the escalating US-Israeli conflict with Iran.
The announcement regarding Russian oil came shortly after the US Energy Department revealed plans to release 172 million barrels from the Strategic Petroleum Reserve in an effort to contain surging oil prices.
The move forms part of a coordinated effort with the International Energy Agency, which has agreed to release a record 400 million barrels from strategic reserves worldwide, including the US contribution.
Despite the large-scale release, the relief for markets was short-lived. Analysts say renewed geopolitical tensions in the Middle East quickly overshadowed the announcement.
Iran’s new Supreme Leader, Mojtaba Khamenei, stated that the country would continue fighting and maintain the closure of the Strait of Hormuz as leverage against the United States and Israel.
Regional tensions intensified further after Iraqi security officials reported that two fuel tankers in Iraqi waters were struck by explosive-laden Iranian boats. An Iraqi official later told state media that operations at the country’s oil ports had been completely halted.
U.S. equities ended sharply lower on Thursday as a surge in oil prices and escalating geopolitical tensions in the Middle East rattled investor sentiment. Markets reacted after Iran indicated that the crucial Strait of Hormuz would remain closed, fueling concerns over a potential inflationary shock driven by rising energy costs.
Investor sentiment has been pressured by the effective halt of shipping through the strategically vital Strait of Hormuz, a narrow waterway responsible for transporting roughly one-fifth of the world’s oil and liquefied natural gas supplies.
The International Energy Agency warned that the ongoing conflict has triggered the largest supply disruption in the history of the global oil market. The agency recently announced the release of record volumes of strategic oil reserves but also lowered its global supply outlook.
Economic data released on Thursday showed that weekly initial jobless claims fell to 212,000, coming in below expectations. Despite the decline, analysts continue to assess the broader labor market outlook following last week’s weaker-than-expected February employment report.
Separately, government data showed the U.S. trade deficit narrowed significantly in January as exports climbed to a record high while imports declined.
Investors are also awaiting quarterly results from Adobe as the software sector grapples with rapid developments in artificial intelligence.
The company, known for products such as InDesign and Acrobat, has seen its shares fall more than 17% this year as concerns grow that emerging AI tools could disrupt traditional software-as-a-service businesses.
The materials contained on this document should not in any way be construed, either explicitly or implicitly, directly or indirectly, as investment advice, recommendation or suggestion of an investment strategy with respect to a financial instrument, in any manner whatsoever. Any indication of past performance or simulated past performance included in this document is not a reliable indicator of future results. For the full disclaimer click here.
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