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US Treasury Secretary Bessent: We will implement unprecedented measures on Iran

US Treasury Secretary Scott Bessent ‌said that Washington is going to apply measures that have "never been seen" on Iran, Reuters reported on Thursday. 

"Watch this space for more announcements coming next week because we are going to apply measures like have never been seen in the history of economic isolation on a country," said Bessent. 

Earlier on Thursday, a senior Islamic Revolutionary Guards Corps (IRGC) official, Hossein Taeb, said that the Strait of Hormuz is "under Iran's control and management" after US President Trump said Washington has "total control" over the waterway, Fox News reported. 

"Today you see that the Strait of Hormuz is under the management and control of the Islamic Republic," Taeb said, according to the semi-official Fars news. He added that Iran was continuing on its course in complete security.

Meanwhile, Iran's joint military command, Khatam al-Anbiya Central Headquarters, stated that no vessel could transit the critical waterway without Tehran's permission.

On Thursday, the United Arab Emirates (UAE) said Iran attacked two of its vessels as they transited the Strait of Hormuz, blasting Tehran for what it called “flagrant” maritime violations.

US Vice President JD Vance on Thursday said he is confident that the United States will emerge from its war with Iran in a stronger position, particularly with respect to Tehran’s nuclear program and stable fuel prices for Americans. 

Market reaction

At the time of writing, the West Texas Intermediate (WTI) is up 0.18% on the day at $81.50.

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

Lallalit Srijandorn

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

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