Financial advisor claims traders are using the region’s tensions to fuel currency speculation

BAGHDAD, January 30 — A senior financial advisor to Iraq’s prime minister has linked a recent spike in the U.S. dollar’s value to rising regional tensions from the ongoing war in Gaza and a spate of retaliatory attacks between the U.S. military and various Iran-backed factions in the region.

Mazhar Saleh, advisor to Mohammed Shiaa’ Al-Sudani, told Al-Sabah newspaper that currency speculators have been able to post profits as a result of the market’s response to growing conflict in the region.

Saleh further said that news of rising tensions is having a particular effect on secondary exchanges, or the black market, where traders hedge rates by one to two points above market prices, in a practice that many have become accustomed to.

“This is practiced by speculators to achieve profits under the pretense of superstition and fear,” Saleh said. “The decisions in this market are based on various types of information as inputs that influence the dealers’ decisions.”

“Therefore, these markets are among the most sensitive in the financial sector, thriving on daily speculations fed by news, rumors, and conflicting information to determine prices, a cost that dissipates with the removal of the influencing factor,” he added.

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