Dollar, yen gain on flight to safety as Hamas attack dents sentiment. On Monday, as unrest in the Middle East worried markets, safe-haven currencies such as the dollar and the Japanese yen increased. In addition, a blowout U.S. employment report gave the greenback an additional boost in value. During the early part of the Asian trading day, the Israeli shekel fell by more than three percent, reaching a nearly eight-year low of 3.9880 per dollar. However, the shekel recovered some of its losses during the tumultuous trade that followed the announcement by the Bank of Israel that it would sell up to thirty billion dollars worth of foreign currency on the open market to preserve stability.

The last time I checked, one dollar could be purchased with around 1.7% less shekel.

The risk perception was shaken as Israeli soldiers fought with gunmen from the Palestinian organization Hamas over the weekend. This occurred just hours after the militants launched a surprise attack on Israel throughout the day that was the worst day of bloodshed in the country in the past 50 years.

Because of this, demand remained strong for the Japanese yen, which has a long history of functioning as a safe-haven currency. As a result, the risk-sensitive Australian dollar fell to 94.61 yen.

Amid the same vein, the euro dropped almost 0.4% to 157.45 yen amid thinner trade across Asia, with Japan being closed for a vacation.

The most recent value that one dollar could buy with one yen was 149.21 yen. “As you’d expect, there’s a lot of uncertainty out there this morning in the markets,” said Tony Sycamore, a market analyst at IG Australia.

“Where some of these risk-aversion moves are going to play out in the (currency) space, the dollar will remain bid… (and) the yen should start to see some more support coming in, but potentially, that’s more on the crosses.”

In other parts of the world, the dollar was also generally stronger, which caused the pound’s value to drop by 0.31% to $1.2194. To trade at $1.0553, the euro had a loss of 0.32%.

The New Zealand dollar fell 0.36% to $0.5968, while the Australian dollar, considered a barometer for risk appetite, fell 0.59% to $0.6347. The New Zealand currency is also down 0.36% to $0.5968.

“There is demand for the U.S. dollar across the board, just because of that safe haven,” according to IG’s Sycamore.

The dollar index was trading 0.1% higher at 106.33 at the time of this writing, getting extra support from data released on Friday indicating that employment in the United States climbed by the highest in eight months in September. This may lay the stage for a higher-than-expected inflation print later this week.

“(The) resoundingly strong employment report will likely keep the (Federal Open Market Committee) on guard as it watches for signs that a tight labor market could prevent inflation from returning to 2% on a sustained basis,” according to Wells Fargo’s economic analysts.

“Another rate hike before the end of the year is a possibility, but our base case remains that the last rate hike of the tightening cycle occurred in July.” According to the market’s pricing, there is a roughly 78% likelihood that the Federal Reserve will maintain the status quo on interest rates at its meeting in November.

China has already returned to work after its weeklong Golden Week break. According to statistics that the government released on Saturday, the country’s foreign exchange reserves dropped by a greater amount than forecast in September. The exchange rate for the onshore yuan remained unchanged at 7.2960 yuan to one dollar.