US and allies strive to douse Israel-Hamas flare up, Iran issues warning

Dhwani Mehta FXStreet

As risks of the Hamas-Israel war engulfing the entire region mount, the United States (US) and its allies step up their efforts to douse the flare-up, as they remain concerned about a potential Iranian intervention in the conflict.

White House National Security Advisor Jake Sullivan said Sunday the US couldn’t rule out Iran intervening either directly or via Hezbollah, the Lebanon-based militia group that it sponsors.

Citing a person familiar with the negotiations, the US has asked Qatar to tell Hezbollah not to open up a second front to the war.

US Secretary of State Antony Blinken urged China’s Foreign Minister Wang Yi to deploy Beijing’s influence in the region toward the same goal.

Meanwhile, regional governments are uniting to try to stop the spreading of the conflict, a person familiar with Gulf efforts said.

In response to this, Iran’s Foreign Minister Hossein Amir Abdollahian warned, “Iran will not remain an observer in this situation and has informed Israel via its allies if its crimes in Gaza continue 'tomorrow will be too late'.”

The Iranian Foreign Minister also met Hezbollah leader Hassan Nasrallah in Beirut on Friday to discuss a response to Israel’s actions, according to the state-run Iranian IRNA news service.

So far, more than 2,300 Palestinians have died in Israel’s retaliatory bombing of Gaza, raising concerns that the attack will spark a humanitarian catastrophe, per Bloomberg.

Market implications

Risk sentiment remains fragile, despite an uptick in the US S&P 500 futures, limiting the renewed weakness in the US Dollar across the board. Meanwhile, Gold price consolidates Friday’s massive surge, trading at around $1,921, as of writing.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

GBP/USD retreats from weekly high vs firmer USD as focus shifts to BoE, US data

The GBP/USD pair struggles to capitalize on the previous day's strong move up to the weekly high and drifts lower during the Asian session on Thursday. Spot prices currently trade around mid-1.3300s, down over 0.10% for the day, and, for now, seem to have stalled the recovery move from a nearly four-week low, touched on Tuesday.

EUR/USD edges lower to near 1.1450 ahead of German/ EU GDP

EUR/USD trades with mild losses around 1.1450 in the early European hours on Thursday. The US Dollar recovers ground on renewed Mideast hostilities, despite a cautious Fed hold. Traders now brace for preliminary readings of the second-quarter Gross Domestic Product (GDP) from Germany, the Eurozone and the US.

Gold extends intraday rejection slide from $4,100

Gold extends its intraday rejection slide from the $4,100 mark and moves further away from a one-week high, touched the previous day. The US Dollar regains positive traction following Wednesday's post-FOMC decline and is seen as a key factor weighing on the commodity.

Mixed signals leave XRP and XLM at crossroads

Ripple and Stellar are trading at critical technical levels on Thursday. XRP has stabilized above the psychological $1.00 support, while XLM is testing support at $0.173. Traders should be cautious as mixed derivatives metrics keep the outlook uncertain for both altcoins. Derivatives data shows mixed sentiment among traders. CoinGlass’ long-to-short ratio for XRP reads 1.02 on Thursday.

Fed review: Reversing course (?)

At face value, the FOMC's 9-3 split decision hold was exactly in line with the expectations we laid out in our Fed preview - a divided hold, 22 July. We also named the three dissenters - Hammack, Logan and Kashkari - as the most likely hawks to support rapid tightening.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.