On October 7, 2023, the Palestinian group Hamas launched a series of brutal attacks on Israel, resulting in the deliberate killing of over 1,000 civilians and the taking of dozens, possibly hundreds, of hostages. These attacks, which involved thousands of missiles and forces infiltrating throughout much of the country's south, sparked a major escalation of violence in the region. In response, Israeli Prime Minister Benjamin Netanyahu declared war on Hamas, vowing to strike back with force.
The attacks carried out by Hamas were unprecedented in their scale and intensity. The group targeted Israel's highly fortified separation fence, blowing up parts of it and sending fighters into Israeli communities along the Gaza frontier.[0] This brazen act of aggression has further escalated tensions between Israel and Hamas, leading to the declaration of war by Israel.[1]
In retaliation, Israel has launched airstrikes on the Hamas enclave in Gaza. These airstrikes are part of a larger military operation aimed at weakening Hamas and preventing further attacks on Israeli territory.[2] The Israeli government has made it clear that it will not tolerate acts of terrorism and will take all necessary measures to protect its citizens.
It is important to note that Hamas is widely recognized as a terrorist organization.[3] The group, whose name stands for the Islamic Resistance Movement, has been involved in numerous acts of violence against Israel over the years.[0] Its attacks on civilian targets and use of tactics such as suicide bombings have been condemned by the international community.
The timing of these attacks by Hamas is significant. In recent weeks, Iran has been vocal in its opposition to the Saudi-Israeli normalization agreement, which aims to improve relations between Israel and Arab countries. Iran sees this agreement as a threat to its own interests and has been working to disrupt it.[4] Iranian Supreme Leader Ali Khamenei has warned that countries that normalize relations with Israel will ultimately lose.[5]
The impact of the Israel-Hamas conflict has also been felt in the oil markets. Iran, a major oil producer and a key backer of Hamas, has become the focus of attention for oil traders.[6] While there is no immediate threat to oil supply, the situation in the region is being closely monitored. The possibility of the conflict spreading to Iran is a concern for traders, as it could have a significant impact on oil prices.
The fallout from the attacks has reverberated through Middle East markets.[7] Stocks in the region have fallen, with Israel's benchmark TA-35 stock index experiencing its biggest loss in over three years.[1] The Mexican peso, often seen as a proxy for emerging markets, has also weakened against the dollar.[7]
In the currency markets, the dollar has strengthened against most major peers as traders react to the Hamas attack.[8] The dollar is seen as a safe haven in times of trouble, leading to a weakening of risk currencies such as the euro and pound. The Norwegian krone, however, has performed well due to the jump in oil prices, which is positive for Norway's exports.[7]
While the conflict between Israel and Hamas has had immediate implications for the region, the potential for further escalation remains a concern. The situation could deteriorate if the conflict spreads to Iran or if other actors become involved.[9] For now, the focus remains on de-escalating the situation and preventing further loss of life. The international community plays a crucial role in facilitating dialogue and finding a peaceful resolution to the conflict.
0. “What is Hamas? A simple guide to the armed Palestinian group” Al Jazeera English, 8 Oct. 2023, https://www.aljazeera.com/news/2023/10/8/what-is-the-group-hamas-a-simple-guide-tothe-palestinian-group
1. “Oil Soars Amid Middle East Conflict, Gold Gains: Markets Wrap” Yahoo Finance, 9 Oct. 2023, https://finance.yahoo.com/news/asia-stocks-set-rise-dollar-214658284.html
2. “WTI surges over 4% to recapture $85 on Middle East violence” FXStreet, 8 Oct. 2023, https://www.fxstreet.com/news/wti-surges-over-4-to-recapture-85-on-middle-east-violence-202310082356
3. “It's high time Arab leaders denounce Hamas as ‘bloody-thirsty terrorists' and ‘oppressors of Palestinians'” All Arab News, 8 Oct. 2023, https://allarab.news/its-high-time-arab-leaders-denounce-hamas-as-bloody-thirsty-terrorists-and-oppressors-of-palestinians/
4. “Iran's Support Against Israel Bolsters Hamas” Council on Foreign Relations, 8 Oct. 2023, https://www.cfr.org/in-brief/irans-support-against-israel-bolsters-hamas
5. “Iran's support for Hamas fans suspicion it's wrecking Israel-Saudi deal” POLITICO Europe, 7 Oct. 2023, https://www.politico.eu/article/iran-hamas-attacks-against-israel-palestine-jerusalem/
6. “As Israel war rages, oil traders are focused on Iran | Mint” Mint, 8 Oct. 2023, https://www.livemint.com/market/stock-market-news/as-israel-war-rages-oil-traders-are-focused-on-iran-11696761415527.html
7. “Dollar Climbs as Traders Seek Safe Havens After Attack in Israel” BNN Bloomberg, 8 Oct. 2023, https://www.bnnbloomberg.ca/dollar-climbs-as-traders-seek-safe-havens-after-attack-in-israel-1.1981949
8. “Dollar Gains as Traders Seek Havens After Hamas Attack in Israel” Bloomberg, 9 Oct. 2023, https://www.bloomberg.com/news/articles/2023-10-08/dollar-climbs-as-traders-seek-safe-havens-after-attack-in-israel
9. “FACTBOX: Hamas attack on Israel raises regional energy stakes” S&P Global, 8 Oct. 2023, https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/oil/100823-factbox-hamas-attack-on-israel-raises-regional-energy-stakes
