The US dollar is heading for its biggest one-day profit in a month as investors run to buy up the US dollar once more for safety after Israel launched strikes against Iran, prompting Iran to launch drones in response.

Military Escalation

Israel said it targeted a large network of military bases in Iran, with Iran responding by launching a large flock of anti-Israel drones.

Despite the attack, US and Iranian officials are still scheduled to talk in Oman on Sunday to discuss a nuclear deal and stop Irans uranium enrichment.

Dollar Regains Haven Status

At first, the Swiss franc and yen rallied before a tumble against the dollar, which regained its status as a safe haven in times of turmoil.

US President Trump urged Iran to acquiesce on a deal and avoid further military actions.

Dollars Surge

The dollar rallied 0.9% against a basket of major rivals, with massive losses sustained by the euro, the pound, and the Australian dollar, with the dollar rallying 0.85% on track for the biggest profit since May 12.

The euro snapped a four-day winning streak with a 0.7% drop to $1.1494, but still remained near a four-year high.

The yen fell 0.6% against the greenback to 144.43, while the franc shed 0.52% to 0.8147.

Investors bought up US treasury bonds, with 10-year yields down 4.7 basis points to a month low at 4.31%.

Gold prices rallied 1.7% to $3444 an ounce, a May high.

Despite the gains, the dollar is still hovering near March 2022 lows after the US-China trade agreement failed to convince the markets with clear points.

The index is expected to fall 1% this week, the heftiest loss in over three weeks.

Inflation

Recent US data showed prices remain under control, in turn boosting the odds of multiple Fed rate cuts this year.

Oil prices rose over $5 a barrel after the Israeli strikes amid concerns about supply disruptions.

The risky atmosphere hurt cryptocurrencies, with bitcoin down 1% to $105,052, while ethereum fell 4% to $2538.