Oil prices surge after US strike kills Iranian general
SEE ALSO :Oil starts higher on trade optimism"This is more than just bloodying Iran's nose," said AxiTrader's Stephen Innes. "This is an aggressive show of force and an outright provocation that could trigger another Middle East war." The killing of Soleimani is a dramatic escalation of tensions between the United States and Iran and comes after a pro-Iran mob this week laid siege to the US embassy in Iraq following deadly American air strikes on the hardline Hashed faction. The attack on the embassy highlighted new strains in the US-Iraqi relationship, which officials from both countries have described to AFP as the "coldest" in years. 'A less safe world' Oil prices saw a record surge in September after attacks on two Saudi Arabian facilities briefly slashed output in the world's top exporter by half, with Trump blaming Iran for the attack and previous other blasts on tankers in the Gulf last year.
SEE ALSO :Trump orders top Iranian general killedThe crisis also comes as tensions between the US and North Korea worsen, with Kim Jong Un declaring a self-imposed moratorium on nuclear and intercontinental ballistic missile tests had ended, with US talks going nowhere. "We are waking up to a less safe world than it was only hours ago, especially if we combine this with simmering tension in the Korean peninsula," Innes added. The drama sent investors rushing for the hills and safe-haven units rallied with the yen up 0.7 per cent against the dollar and gold climbing more than one per cent. High-risk currencies retreated against the greenback, with South Korea's won down 0.6 per cent, Australia's dollar down 0.4 per cent and the South African rand down more than one per cent. Equities were mixed, having been enjoying the second day of the year rallying on trade optimism.
SEE ALSO :Oil jumps after US kill Iranian generalHong Kong fell 0.2 per cent by the break, while Shanghai shed 0.3 per cent. Singapore retreated 0.5 per cent and Taipei dropped with Mumbai. But Seoul, Sydney, Wellington, and Manila were in positive territory. Markets had all been well up before news of the strike, thanks to ongoing optimism fuelled by the China-US trade agreement, looser central bank monetary policies and easing Brexit worries.
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