A wave of risk aversion swept over markets on Friday and sent investors chasing after traditional safety assets such as the Swiss franc and the yen following reports that Israel attacked Iran in an escalation of conflict in the Middle East. 

Markets initially reacted sharply to the news, which sparked a huge selloff in risk assets, caused oil and gold prices to surge, and ignited a rally in U.S. Treasuries and safe-haven currencies.Some of those moves were later retraced as few details emerged about the attack and an Iranian official told Reuters no missile attack took place. 

Still, the Swiss franc, a traditional safe-haven currency, remained 0.35% higher on the day at 0.9089 per dollar, having rallied 1% earlier in the session. Moves in the Swissie were more pronounced against the euro, with the common currency last 0.4% lower at 0.96685 francs, after sliding as much as 1.5% earlier. 

The yen rose roughly 0.2% to 154.38 per dollar, after having rallied more than 0.6% in a knee-jerk reaction to reports of the attack.”It’s pretty obvious the market is nervous,” said Moh Siong Sim, a currency strategist at Bank of Singapore.”I think markets are at this stage in a flight-to-safety mode … Right now, we’re still in a situation where we know something has happened. But we need to understand the degree of retaliation,” Sim said.- Reuters