Safe-haven currencies such as the Japanese yen jumped to their highest in months on Friday after U.S. air strikes on Baghdad airport killed a senior Iranian military official, stoking tensions in the Middle East.
U.S. Treasuries, oil prices and gold rallied after an Iraqi militia spokesman told Reuters that Iranian Major-General Qassem Soleimani and Iraqi militia commander Abu Mahdi al-Muhandis were killed in the attack.
The Pentagon confirmed the strike, saying Soleimani was actively developing plans to attack Americans in Iraq and the Middle East.
The Japanese yen hit a two-month high of 107.92 against the U.S. dollar and was last up 0.5% on the day.
A stronger dollar sent the pound down 0.2% to $1.3117 and 0.1% lower against the euro at 85.10 pence.
Elsewhere, the Hong Kong dollar jumped to a 2-1/2-year high of 7.7770 against the U.S. dollar.