The euro fell in European trading on Friday against a basket of global currencies, deepening its losses for the fourth consecutive day against the US dollar and hitting its lowest level in four months. The single European currency is on track for a second straight weekly loss due to the global energy price crisis and its negative impact on the European economy.

The US currency continues to shine in the foreign exchange market as investors keep buying the dollar as the preferred safe-haven asset amid escalating military confrontations between the United States and Israel on one side and Iran on the other.

Price Overview

Euro exchange rate today: the euro fell 0.1% against the dollar to $1.1500, the lowest level since last November, from the session opening level of $1.1511, after reaching a high of $1.1530.

The euro ended Wednesday’s session down 0.5% against the dollar, marking its third consecutive daily loss due to renewed concerns about energy prices.

Weekly performance

Over the course of this week’s trading, which officially ends with today’s settlement, the euro has declined about 1% against the US dollar so far, heading for a second consecutive weekly loss.

Global energy prices

Energy prices, including oil and natural gas, have surged sharply as Iran escalated attacks on oil facilities and transportation infrastructure across the Middle East, increasing fears of a prolonged conflict and potential disruptions to energy flows.

Iran’s new Supreme Leader, Mojtaba Khamenei, pledged on Thursday to keep the Strait of Hormuz closed. The Iranian military command warned the previous day that the world should prepare for oil prices reaching $200 per barrel after three more ships were attacked in the blockaded Gulf.

Analysts at Wells Fargo said in a note that the euro faces a difficult situation. Europe’s natural gas storage refill season is approaching, and the European Union is preparing to start the season with record-low gas levels in storage, meaning it will need to purchase large volumes of energy immediately, with the risk of significantly higher prices.

US dollar

The dollar index rose more than 0.1% on Friday, extending gains for the fourth consecutive session and reaching a four-month high of 99.86 points, reflecting the continued strength of the US currency against a basket of global currencies.

The rally comes as investors continue buying the dollar as a preferred safe-haven asset, with the Iran war approaching its third week and fears growing that the conflict could widen across the Middle East. This has pushed energy prices sharply higher and increased negative pressure on the global economy.

European interest rates

Money markets currently price only a 5% probability that the European Central Bank will cut interest rates by 25 basis points at the March meeting.

Meanwhile, amid rising global energy prices, data from the London Stock Exchange Group (LSEG) suggests the European Central Bank could raise interest rates in June.

To reassess these expectations, investors are awaiting further economic data from the eurozone on inflation, unemployment, and wage levels.

The Japanese yen fell in Asian trading on Friday against a basket of major and minor currencies, deepening its losses for the fourth consecutive day against the US dollar and hitting its lowest level in 20 months. The currency is heading toward a fourth straight weekly loss as investors continue buying the US dollar as a preferred safe-haven asset amid escalating military confrontations in the Middle East.

Japanese authorities are closely monitoring movements in the domestic currency in the foreign exchange market, although the room for intervention appears more limited than in previous periods. This comes despite pressure pushing the yen toward the ¥160 per dollar level, which was previously viewed as a threshold that could trigger official intervention.

Price Overview

Japanese yen exchange rate today: the US dollar rose 0.25% against the yen to ¥159.68, the highest level since July 2024, up from the session opening level of ¥159.32, with a session low of ¥159.01.

The yen ended Thursday’s session down about 0.25% against the dollar, marking its third consecutive daily loss due to the escalation of the Iran war.

Weekly performance

Over the course of this week’s trading, which officially ends with today’s settlement, the Japanese yen has fallen about 1.25% against the US dollar so far, putting it on track for a fourth consecutive weekly loss.

US dollar

The dollar index rose more than 0.1% on Friday, extending its gains for the fourth straight session and reaching a four-month high of 99.86 points, reflecting the continued strength of the US currency against a basket of global currencies.

The rally comes as investors continue buying the dollar as a preferred safe-haven asset, with the Iran war approaching its third week and fears growing that the conflict could widen across the Middle East. This has pushed energy prices sharply higher and increased negative pressure on the global economy.

Global oil prices

Oil prices surged sharply as Iran intensified attacks on oil facilities and transportation infrastructure across the Middle East, increasing fears of a prolonged conflict and potential disruptions to global oil flows.

Iran’s new Supreme Leader, Mojtaba Khamenei, pledged on Thursday to keep the Strait of Hormuz closed. The Iranian military command had already warned the previous day that the world should prepare for oil prices reaching $200 per barrel after three more ships came under attack in the blockaded Gulf.

Analysts said the International Energy Agency’s proposal to release 400 million barrels from oil reserves — a record amount — would not be sufficient to ease fears of supply disruptions from the Middle East.

Japanese authorities

Finance Minister Satsuki Katayama avoided giving a direct answer on Friday when asked about the possibility of intervening in the currency market, saying the government is ready to act at any time “while considering the impact that currency movements may have on citizens’ livelihoods.”

Katayama told parliament earlier this week that Japan had “strongly urged” its Group of Seven counterparts to hold a meeting to discuss measures to address rising oil prices, referring to discussions that resulted in an agreement to consider releasing emergency strategic oil reserves.

Shota Ryu, a foreign exchange strategist at Mitsubishi UFJ Morgan Stanley Securities, said that if Japan intervenes now, the impact may be limited because dollar buying as a safe haven is likely to continue unless the situation in the Middle East stabilizes.

Ryu added that intervention could even encourage speculators to sell the yen again once it rebounds.

Japan justifies intervention in the foreign exchange market based on an agreement among the advanced G7 economies allowing authorities to intervene to counter excessive volatility caused by speculative moves that deviate from economic fundamentals.

Japanese interest rates

Markets currently price a 5% probability that the Bank of Japan will raise interest rates by a quarter point at the March meeting, while the probability of a quarter-point hike in April stands at 35%.

In the latest Reuters survey, the Bank of Japan is expected to raise interest rates to 1% by September.

Analysts from Morgan Stanley and MUFG wrote in a joint research report that while the probability of a rate hike in March or April had already been considered low, the growing uncertainty surrounding developments in the Middle East makes it more likely that the Bank of Japan will adopt a more cautious stance, reducing the chances of near-term rate increases.

To reassess these expectations, investors are awaiting further economic data on inflation, unemployment, and wages in Japan.

Most cryptocurrencies declined during Thursday’s trading as risk appetite weakened amid the escalating impact of the war and military operations between the United States and Iran, particularly on global energy supplies.

Two tankers reportedly caught fire in Iraqi waters in a clear escalation of Iranian attacks that have disrupted energy supplies in the Middle East, pushing oil prices sharply higher during the day.

Iran’s new Supreme Leader, Ayatollah Mojtaba Khamenei, renewed threats of retaliation for what he described as the “blood of martyrs,” while confirming that the Strait of Hormuz would remain closed and that attacks on US bases would continue.

As oil prices rose above $100 per barrel due to the Iran war, the closure of the Strait of Hormuz, and supply disruptions, concerns have increased that inflation could rise significantly in the United States, raising the possibility of a 1970s-style stagflation scenario.

US Energy Secretary Chris Wright told CNBC that the US Navy is “not ready” at this time to escort oil tankers through the Strait of Hormuz, while also ruling out the possibility of oil prices rising to $200 per barrel.

Government data released today showed that initial US jobless claims fell slightly to 213,000 last week, compared with expectations that they would remain unchanged at 214,000.

Investors are now pricing in only one Federal Reserve interest rate cut of 25 basis points this year, compared with expectations of two cuts before the Middle East conflict erupted.

In trading, Ripple fell 1.2% to $1.37 as of 20:46 GMT on the CoinMarketCap platform.

The semiconductor sector is facing growing pressure, threatening the global economy as a whole. The industry that produces the computer chips powering the digital world requires vast resources to operate efficiently, including critical minerals and large amounts of energy. With the war being waged by the United States and Israel in Iran, these supply chains are facing significant disruptions.

Although former US President Donald Trump said on Monday that the war would end “very soon,” concerns remain that the conflict and its repercussions could be long-lasting. Such a scenario could prove catastrophic for a wide range of global supply chains, in addition to the mounting human and environmental costs already emerging.

Computer chips are now an indispensable component of the global digital economy. As Duke University’s Deep Tech blog noted, semiconductors have “reshaped the digital era and are embedded in everything from satellites and smartphones to medical devices and electric vehicles.” Any disruption to their availability or increase in their cost could therefore have major consequences for producers and consumers worldwide.

Ray Wang, a memory analyst at SemiAnalysis, told CNBC: “A prolonged regional conflict could disrupt chip manufacturing by affecting access to materials such as helium and bromine. For now the impact appears limited, but if the conflict continues companies may need to reorganize their sourcing of these critical materials.”

The Middle East’s importance despite the focus on Taiwan

While more than 90% of advanced chips are produced in Taiwan, the Middle East remains central to supply chains. Qatar, for example, produces more than one-third of the world’s helium, a key element used in semiconductor cooling systems and circuit printing. Any major disruption to global helium supply—whether due to production or transportation issues—cannot easily be replaced with alternative materials.

The semiconductor industry was already facing major challenges due to the concentration of production in Taiwan, which itself faces energy security concerns and relies heavily on external imports, in addition to ongoing tensions with China. With global oil supplies now disrupted by the war in Iran, these risks could intensify and affect Taiwan’s vital energy supply, with broader consequences for the global economy.

Direct impact on South Korean chipmakers and the expansion of artificial intelligence

Semiconductor manufacturers in South Korea are facing an even greater shock than their counterparts in Taiwan, as they are the main producers of memory chips, which have seen rapidly rising demand due to the expansion of artificial intelligence.

If the prices of these chips rise significantly, AI activity could slow as costs become too high.

Jingjie Yu, an equity analyst at Morningstar, said: “This could significantly increase the total cost of ownership for hyperscalers, threatening the adoption of AI infrastructure. A prolonged war could lead to a decline in demand for memory chips used in AI.”

A new threat to digital infrastructure

The conflict has taken a dangerous turn for the technology sector after Iran’s Revolutionary Guard–affiliated Tasnim news agency published a list of “new targets” this week. The list reportedly included regional offices, cloud infrastructure, and data centers linked to companies such as Google, Amazon, Microsoft, Nvidia, IBM, Oracle, and Palantir.

The threats have not remained merely theoretical. Iranian drones reportedly targeted three AWS data centers in the United Arab Emirates and Bahrain, marking the first military attacks on US cloud service providers and causing fires, power outages, and disruptions to payment and banking services. AWS advised clients to shift computing workloads entirely outside the Middle East.

Direct economic consequences

Nvidia temporarily closed its offices in Dubai following the attacks, Amazon shut its regional offices, and Google employees in Dubai were stranded after flight cancellations.

Meanwhile, Samsung and SK Hynix have reportedly lost more than $200 billion in market value since the start of the war. South Korea’s Ministry of Industry also warned that the semiconductor supply chain depends on at least 14 inputs from the Middle East, in addition to helium.

Patrick Murphy, executive director of the geopolitics unit at Hilco Global, said: “Iran used to target oil fields, but its recent attacks on data centers in the UAE show that it now considers digital infrastructure a strategic target.”