Iran's Foreign Ministry: Management of Hormuz belongs to coastal countries
A spokesperson from the Iranian Foreign Ministry said during the European session on Monday 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."
Separately, 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, the Iranian Student News Agency (ISNA) reported.
“Management of the Strait of Hormuz is an Iranian-Omani issue which Tehran is negotiating with Oman,” a senior Iranian diplomat said.
The statement from Tehran appears to be in contrast with the post on Truth Social from US President Donald Trump, released over the weekend, where he said that the agreement with Iran is "largely negotiated", adding, “Final aspects and details of the Deal are currently being discussed, and will be announced shortly. In addition to many other elements of the Agreement, the Strait of Hormuz will be opened."
Additional remarks from Iran's Foreign Ministry
We do not currently have a plan to send a delegation to Pakistan.
We've reached conclusions on many topics discussed, but that does not mean we're close to signing an agreement.
End of war on all fronts, including Lebanon, will be part of the potential agreement.
We will not take tolls on the Strait of Hormuz.
It's normal that services that will be provided would require a price, but should not be presented as tolls.
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.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
