Russia: Have options to hurt US economically if Washington continues sanctions spiral

Eren Sengezer FXStreet

Russia's foreign ministry announced on Friday that they will be expelling US diplomats proportionally to the US' decision to expel Russian diplomats, as reported by Reuters.

Additional takeaways

"Will reduce the number of short-term visas issued to US diplomats."

"We understand that we are limited in ability to cause economic damage to US."

"Will ban US embassy in Russia from hiring citizens of Russia and third countries."

"We would like to avoid further escalation with Washington."

"We are ready for dialogue with US to find ways to normalise relations."

"Eight high-ranking serving and former US officials responsible for Washington's anti-Russian course will be banned from Russia."

"We stand ready to cut US diplomatic presence in Russia to 300 people if Washington doesn't change course."

"Have options to hurt the US economically if Washington wants to continue a sanctions spiral."

Market reaction

This development doesn't seem to be weighing on market sentiment. As of writing, the S&P 500 Index was up 0.18% on the day at 4,177.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD climbs above 1.1600 as markets cheer US-Iran deal

EUR/USD gathers bullish momentum and trades above 1.1600 on Monday. The US and Iran have reached a deal to reopen the Strait of Hormuz on Sunday, which underpins risk sentiment, supporting the Euro against the US Dollar. Now, the main focus this week remains on the Fed policy decision due on Wednesday.

GBP/USD retreats from 10-day high, holds above 1.3200

GBP/USD pulls away from the 10-day high it touched above 1.3460 but manages to stay in positive territory above 1.3400. The positive shift seen in risk mood following news of the US and Iran reaching a framework agreement to end the conflict and reopen the Strait of Hormuz helps the pair hold its ground.

Gold rallies beyond $4,300 as geopolitical tensions ease

Gold rises sharply on Monday and trades well above $4,300, gaining nearly 3% on the day. The precious metal gathers bullish momentum after the United States and Iran had reached a deal to end their conflict, easing concerns about inflation and higher interest rates.

Bitcoin consolidates gains, Ethereum defends support, XRP nears breakout trigger

Bitcoin, Ethereum and Ripple begin the week on a constructive note as the top three cryptocurrencies attempt to extend rebounds after recovering nearly 4%, 2% and 2.6%, respectively. BTC steadies around $65,600, ETH continues to hold firmly above the key $1,700 support, while XRP nears the upper boundary of the falling channel pattern.

President Trump announced that the deal with Iran is complete

President Trump announced that the deal with Iran is complete and he authorises the toll-free opening of the Strait of Hormuz and removal of the US Naval blockade. While the agreement is made, it is expected to be signed on Friday to take effect. The Forex market looks stable and could react slowly to the positivity around the news as Iran still expresses its mistrust on the US.

4.2% headline, 0.2% core: Why the Fed's next hike may be targeting the wrong problem

May's CPI put headline inflation at 4.2% on the year, up from 3.8% in April and the hottest reading since April 2023, while core prices rose just 0.2% on the month, undershooting the 0.3% consensus and halving April's pace.