The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.

The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.

Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.

In the world of financial jargon the two widely used terms “risk-on” and “risk off” refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.

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Australia has evacuated a small number of citizens from Israel, and New Zealand embassy staff have left Iran, but the two governments warned that closed airspace limited how they can assist thousands of citizens requesting help to leave the conflict zone.

Around 1,500 Australians in Iran have registered for assistance, with another 1,200 Australians in Israel seeking to leave, Australian Foreign Minister Penny Wong said on Thursday.

The Australian government evacuated a small group from Israel through a land border crossing on Wednesday, and would look for more opportunities over the next day, Wong told reporters.

“There are real limits, hard limits, on what the government can do. The airspace remains closed,” she said.

Australians in Iran were advised to leave if it was safe to, or shelter in place.

Senior US officials are preparing for the possibility of a strike on Iran in the coming days, according to people familiar with the matter, a sign that Washington is assembling the infrastructure to directly enter a conflict with Tehran.

The situation is still evolving and could change, said the people, who requested anonymity to discuss private talks. Some of the people pointed to potential plans for a weekend strike. Top leaders at a handful of federal agencies have also begun getting ready for an attack, one person said.

President Donald Trump has for days publicly mused about calling for such a strike on Iran, which has been engaged in a war with Israel for nearly a week.

Trump told reporters at the White House Wednesday he has “ideas as to what to do” and that he prefers to make the “final decision one second before it’s due” because the situation in the Middle East is fluid.

A few hours earlier Trump said, “I may do it. I may not do it,” when asked if he was moving closer to attacking Iran.

A White House official said that all options remain on the table.

The president’s openness to war is a reversal from his public remarks a week ago when Trump was urging for diplomatic talks to reach a nuclear disarmament deal with Iran.

Waiting a few days to strike gives Iranian leaders additional runway to demonstrate to Trump that they are willing to give up some uranium enrichment capabilities in order to deter a US attack.

Iranian Foreign Minister Abbas Araghchi said in a social media post earlier Wednesday that his country remained “committed to diplomacy” and had never sought and would never seek nuclear weapons.

Foreign ministers from the UK, France and Germany are planning to hold nuclear talks with their Iranian counterpart on Friday in Geneva, according to a person familiar with the matter.

Trump’s rhetoric has shifted significantly in recent days as allies have impressed upon him that Iran is close to obtaining a nuclear weapon. Senator Lindsey Graham of South Carolina has been a central voice urging the president to consider military action, according to people familiar with the discussions. Trump has had multiple calls with Graham, the people said.

“He gave them a chance for diplomacy. I think they made a miscalculation,” Graham said of Iran on Wednesday. “The sooner we end this threat to mankind, the better.”

Graham, who said he spoke with Trump on Tuesday, said the president is “very focused, very calm” and “means it” when he says he doesn’t want Iran to control a nuclear weapon.

Foreign Wars

Trump for years has called for the US to stay out of foreign conflicts and campaigned on a message that he would prevent another World War and focus on domestic issues.

Trump said he encouraged Benjamin Netanyahu in a call Tuesday to “keep going” with his offensive operations, adding that he gave the Israeli premier no indication that US forces would participate in the attacks.

Since Israel’s strikes started, Iran has fired 400 ballistic missiles and hundreds of drones at Israel, killing 24 people and injuring more than 800, according to the Israeli government. At least 224 Iranians have been killed by Israel’s attacks.

More stories like this are available on bloomberg.com

©2025 Bloomberg L.P.

Published on June 19, 2025

Trump keeps world guessing about US military action against Iran

WASHINGTON/DUBAI/JERUSALEM: President Donald Trump kept the world guessing about whether the United States will join Israel’s bombardment of Iranian nuclear sites as the Israel-Iran conflict entered its seventh day on Thursday.

Speaking to reporters outside the White House, Trump declined to say if he had made any decision on whether to join Israel’s campaign. “I may do it. I may not do it. I mean, nobody knows what I’m going to do,” he said.

Trump in later remarks said Iranian officials wanted to come to Washington for a meeting and that “we may do that.” But he added, “It’s a little late” for such talks.

The foreign ministers of Germany, France and Britain plan to hold nuclear talks with their Iranian counterpart on Friday in Geneva aimed at persuading Iran to firmly guarantee that it will use its nuclear program solely for civilian purposes, a German diplomatic source told Reuters.

But while diplomatic efforts continue, some residents of Tehran, a city of 10 million people, on Wednesday jammed highways out of the city as they sought sanctuary from intensified Israeli airstrikes.

The Wall Street Journal said Trump had told senior aides he approved attack plans on Iran but was holding off on giving the final order to see if Tehran would abandon its nuclear program.

Asked if he thought the Iranian government could fall as a result of the Israeli campaign, Trump said: “Sure, anything could happen.”

Referring to the destruction or dismantling of Iran’s Fordow nuclear enrichment center, Trump said: “We’re the only ones that have the capability to do it. But that doesn’t mean I’m going to do it — at all.”

Military analysts believe that Israel might need US military help to destroy Fordow, dug beneath a mountain near the city of Qom.

Iranian Supreme Leader Ayatollah Ali Khamenei, 86, rebuked Trump in a recorded speech played on television, his first appearance since Friday.

The Americans “should know that any US military intervention will undoubtedly be accompanied by irreparable damage,” he said. “The Iranian nation will not surrender.”

In its latest bombings, Israel said its air force destroyed Iran’s police headquarters.

Israel’s military said sirens sounded in northern Israel just before 2 a.m. local time on Thursday and that it had intercepted a drone launched from Iran. It said several minutes later that another drone was intercepted in the Jordan Valley area.

The Iranian missile salvoes mark the first time in decades of shadow war and proxy conflict that a significant number of projectiles fired from Iran have penetrated defenses, killing Israelis in their homes.

Israeli Prime Minister Benjamin Netanyahu, in a video released by his office on Wednesday, said Israel was “progressing step by step” toward eliminating threats posed by Iran’s nuclear sites and ballistic missile arsenal.

“We are hitting the nuclear sites, the missiles, the headquarters, the symbols of the regime,” Netanyahu said.

Israel, which is not a party to the international Non-Proliferation Treaty, is the only country in the Middle East believed to have nuclear weapons. Israel does not deny or confirm that.

Netanyahu also thanked Trump, “a great friend of the state of Israel,” for standing by its side in the conflict, saying the two were in continuous contact.

Trump has veered from proposing a swift diplomatic end to the war to suggesting the United States might join it.

In social media posts on Tuesday, he mused about killing Khamenei.

Russian President Vladimir Putin, asked what his reaction would be if Israel did kill Iran’s Supreme Leader with the assistance of the United States, said on Thursday: “I do not even want to discuss this possibility. I do not want to.”

A source familiar with internal discussions said Trump and his team were considering options that included joining Israel in strikes against Iranian nuclear installations.

Iran’s mission to the United Nations mocked Trump in posts on X, describing him as “a has-been warmonger clinging to relevance.”

Israel’s military said scores of Israeli jets had struck targets in and around Tehran and in western Iran in the previous 24 hours in three waves, hitting sites producing raw materials, components and manufacturing systems for missiles.

Fleeing Tehran

Arezou, a 31-year-old Tehran resident, told Reuters by phone that she had made it out of the city to the nearby resort town of Lavasan.

“My friend’s house in Tehran was attacked and her brother was injured. They are civilians,” she said. “Why are we paying the price for the regime’s decision to pursue a nuclear program?”

In Israel, sirens rang out anew at dusk on Wednesday warning of further incoming Iranian missiles. A motorist was injured by missile debris, Israeli medics said. The army later advised civilians they could leave protected areas, signalling the threat had passed.

At Ramat Gan train station east of Tel Aviv, people were lying on city-supplied mattresses or sitting in the odd camping chair, with plastic water bottles strewn about.

“I feel scared, overwhelmed. Especially because I live in a densely populated area that Iran seems to be targeting, and our city has very old buildings, without shelters and safe spaces,” said Tamar Weiss, clutching her four-month-old daughter.

Iran has reported at least 224 deaths in Israeli attacks, mostly civilians, but has not updated that toll for days.

Since Friday, Iran has fired around 400 missiles at Israel, some 40 of which have pierced air defenses, killing 24 people, all of them civilians, according to Israeli authorities.

Leverage

Iran has been exploring options for leverage, including veiled threats to hit the global oil market by restricting access to the Gulf through the Strait of Hormuz, the world’s most important shipping artery for oil.

Inside Iran, authorities are intent on preventing panic and shortages. Fewer images of destruction have been allowed to circulate than in the early days of the bombing, when state media showed pictures of explosions, fires and flattened apartments. A ban on filming by the public has been imposed.

The communications ministry said on Wednesday that temporary restrictions on Internet access would be imposed to help prevent “the enemy from threatening citizens’ lives and property.”

Iran’s ability to hit back hard at Israel through strikes by proxy militia close to Israeli borders has been limited by the devastating blows Israel has dealt to Tehran’s regional allies — Hamas and Hezbollah — in conflicts in Gaza and Lebanon since 2023.