Iran and Russia to hold joint naval drill - Reports

Iran's commander says Iran and Russia to hold a joint naval drill in the Indian ocean in the near future, as tensions grow between Iran and West over the passage of oil tankers through Strait of Hormuz.

"We have agreed on a joint naval drill in the Indian Ocean region, and we hope that it will be held by the end of the year," Hossein Khanzadi told official IRNA news agency. An Iranian navy commander said, "Coordination and planning meetings (over the drill) between Tehran and Moscow will start soon," he noted.

This follows news back in late April that Khanzadi had unveiled plans for a joint naval drill with Russia in coming months. The Iranian Navy chief further noted that the agreement was the first of its kind between Tehran and Moscow and aimed to boost military cooperation between the two countries particularly with regard to naval forces. This all follows the recent US military deployment in the Persian Gulf, which was citing an alleged Iranian threat and which sparked global concerns that the US may be planning to wage war on Iran.

FX implications

This news couldn't come on a worse week for trend traders. Just as markets are getting set for some good old fashioned economic data and events to drive some direction into a directionless market place, geopolitical headlines such as this are sure to keep FX on shaky grounds. The usual suspects, such as the Yen, CHF, Gold and Dollar will likely attract a safe-haven bid on such escalations, whereas oil will find support on supply concerns out of the related regions.