Iran assures discussing nuclear and uranium issue in exchange for lifting sanctions
According to the Iranian Student News Agency (ISNA), a senior Iranian diplomat said that the nuclear issue and highly enriched uranium reserves will be discussed with the United States (US) in 60-day negotiations in exchange for the lifting of sanctions and unfreezing of assets.
“Management of the Strait of Hormuz is an Iranian-Omani issue which Tehran is negotiating with Oman,” a senior Iranian diplomat said.
Separately, a spokesperson from the Iranian Foreign Ministry said that Tehran is "negotiating an end to the war and is not currently discussing nuclear issues." He added, "Management of the strait belongs to the coastal countries."
The statement from Tehran indicates that US President Donald Trump's demands of Iran handing over its uranium enrichment and surrendering its nuclear ambitions were not part of the "largely negotiated" terms of the agreement, which he stated in his post on Truth Social over the weekend.
Market reaction
A strong recovery move is seen in the WTI Oil price and the US Dollar (USD) after comments from Iran. As of writing, the WTI Oil price bounces back to near $91.60 from its intraday low of $89.52. The US Dollar Index (DXY) recovers to near 99.10 after stabilizing around 99.0.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.