Geopolitical Risk

The Australian dollar tumbled sharply on Friday morning as news of Israel’s air strikes on Iran sent ripples through global financial markets. In a matter of hours, the currency depreciated by approximately 1.0 percent against the U.S. dollar, reflecting a classic “risk-off” response to geopolitical turmoil. Simultaneously, oil prices spiked and U.S. Treasury bonds rallied, underscoring investors’ flight to safety amid growing concerns over Middle East escalation.

United States President Donald Trump has flagged a significant shift in American pharmaceutical policy, announcing plans to introduce a “major tariff on pharmaceuticals” during a speech to Republican lawmakers. The policy, he said, aims to force multinational pharmaceutical companies to relocate their manufacturing operations to the United States—a move that could have global implications, particularly for close allies like Australia.