Forex Today: Investors seek refuge on reports of Israel attacking Iran

Here is what you need to know on Friday, April 19:

Safe-haven flows dominate the action in financial markets on the last trading day of the week as investors seek refuge on growing fears over a deepening conflict in the Middle East. The economic calendar will not feature any high-tier data releases and market participants will keep a close eye on geopolitical headlines.

In the early hours of Friday, reports of Israeli missiles striking Iran triggered a flight to safety. Although Israel is yet to officially confirm a retaliatory attack against Iran, several news outlets, such CBS and CNN, reported US officials saying that Israel has carried out the strike. On the other hand, Iranian state media said that the air defense system brought down three drones over the central city of Isfahan. Moreover, a senior Iranian official told Reuters that there was no plan for an immediate retaliation because there was no clarification on who was behind the incident.

Risk-aversion grips financial markets after Israeli missiles strike a site in Iran.

Reflecting the risk-averse market atmosphere, US stock index futures are down between 0.55% and 0.8% in the early European session. Meanwhile, the US Dollar Index holds relatively steady above 106.00 after closing in positive territory on Thursday.

With the immediate reaction to the news, crude oil prices shot higher. After reaching a daily high of $85.58 during the Asian trading hours, the barrel of West Texas Intermediate (WTI) erased a large portion of its gains and was last seen rising 1.6% on the day at $83.15.

Gold spiked above $2,410 following the reports but returned to the $2,380 area into the European morning. 

EUR/USD turned south and came within a touching distance of 1.0600 early Friday. The pair managed to erase its losses and was last seen trading flat on the day, slightly below 1.0650.

GBP/USD slumped to its weakest level since November below 1.2400 in the Asian session. The pair reversed its direction and recovered toward 1.2430 heading into the European session.

During the Asian trading hours, the data from Japan showed that the National Consumer Price Index (CPI) rose 2.7% on a yearly basis in March, down slightly from the 2.8% increase recorded in February. This reading came in line with the market expectation. In the meantime, Bank of Japan (BoJ) Governor Kazuo Ueda said that they may raise interest rates again if the Yen's declines considerably increase inflation, highlighting the impact currency moves may have on the timing of the next policy shift. After falling sharply toward 153.50 earlier in the day, USD/JPY retraced its decline and was last seen trading virtually unchanged on the day near 154.50.