Oil spikes as Israel prepares Iran attack; USD/JPY, AUD/USD react

Oil prices surged 3% in Asian trading Wednesday on reports Israel is preparing a potential attack on Iran, sparking geopolitical risk concerns. Brent crude jumped to $78.50/barrel, while WTI climbed to $74.30/barrel. The oil-sensitive Canadian dollar strengthened, with USD/CAD dropping 0.4% to 1.3320. Traditional safe-haven currencies also benefited, with USD/JPY falling 0.3% to 138.80 and the Swiss franc gaining. In contrast, the risk-sensitive AUD/USD pair slid 0.5% to 0.6680. Gold, another safe-haven asset, rose 0.8% to $1,950/oz. Heightened Middle East tensions could further support oil prices and haven currencies in the near-term. However, if the situation de-escalates, the moves could reverse. Traders are advised to monitor developments closely and manage risk appropriately given the fluid geopolitical landscape.