Reports of an impending Irani invasion on Israel boost safe havens

The news that Iran is getting ready to launch a ballistic missile attack against Israel on Tuesday caused safe-haven currencies like the Swiss franc and the Japanese yen to rise, while U.S. jobs figures indicated a robust labor market.
On Tuesday, a top White House official stated that the US actively backs Israel’s defense preparations.
“A direct confrontation between Iran and Israel is always at risk of ballooning,” stated Adam Button, chief currency analyst at ForexLive in Toronto. “The market has mostly disregarded the Middle East issue in the last month.”The value of the Japanese yen increased by 0.1% to 143.5 from the US dollar. Erasing prior gains, the dollar was essentially flat against the Swiss franc at 0.846.
At 101.15, the dollar index increased by 0.4%.
A day after Federal Reserve Chair Jerome Powell retreated from the prospect of a second 50-basis-point rate decrease at the U.S. central bank meeting next month, U.S. data on Tuesday indicated a robust economy.
After two consecutive months of declines, U.S. job postings unexpectedly climbed in August; nonetheless, hiring remained modest and in line with a sluggish labor market.The Institute for Supply Management (ISM) said that although U.S. manufacturing remained stable in September at lower levels, new orders improved and input prices dropped to a nine-month low. These developments, along with the decline in interest rates, portend well for an uptick in activity in the months ahead.
Traders are attempting to determine the probability that the Fed will reduce interest rates by 50 basis points during its meeting on November 6-7.Powell said on Monday that the Fed was not “in a rush” and would probably continue to decrease interest rates by quarter percentage points going forward, following data that increased confidence in the rate of expansion of the economy and consumer spending.
According to the CME Group’s FedWatch Tool, traders are pricing in a 41% possibility of a 50 basis point decrease in November, up from roughly 35% on Monday but down from 58% a week earlier.The U.S. central bank on Sept. 18 cut rates by 50 basis points, which Powell called a “recalibration” to account for the steep decrease in inflation since last year.
“The possibility of a 50 bps decrease remains open since it would be justified if economic data collapses. However, Powell obviously believes that the markets are “overexcited” about the impending cuts, according to City Index senior market analyst Matt Simpson.
The next two important U.S. economic releases are the highly anticipated government employment report for September and the ISM’s non-manufacturing survey, which are both due out on Thursday.
The European Central Bank (ECB) made dovish remarks, which caused the euro to drop by 0.55% at $1.1075.
“The new developments increase our confidence that inflation will return to target in a timely manner,” ECB President Christine Lagarde told the parliament, adding that the policy decision on October 17 should take this into account.
Policymaker Olli Rehn added that there are more grounds for an interest rate reduction at the ECB’s October meeting because the euro zone’s inflation is slowing down.