US forces to withdraw from vicinity of Iran and lift blockade in draft MOU – Iran's State TV

Eren Sengezer FXStreet

Iran's State TV reported that it has a draft of the initial unofficial framework of the Memorandum of Understanding with the United States (US).

According to the document, the US military forces will withdraw from the vicinity of Iran and lift the naval blockade. In Return, Iran has committed to restoring the number of commercial transit ships through Hormuz Strait to pre-war levels within in one month.

Key takeaways

"Military vessels are not included in this draft agreement."

"The management and route of ship traffic through Strait of Hormuz will be handled by Iran in cooperation with Oman."

"If a final deal is reached within 60 days, this agreement will be approved in the form of a binding UN security council resolution."

"The Islamabad Memorandum framework is not yet finalized; no step will be taken by Iran without tangible verification."

Market reaction

The US Dollar (USD) Index edged lower with the immediate reaction and was last seen losing 0.12% on the day at near 99.00.

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.

GBP/USD surrenders some gains, back to 1.3420

GBP/USD holds on to moderate gains above 1.3400 the figure on Friday. Optimism surrounding the UK government’s leadership transition and expectations of further BoE tightening support the British Pound, while easing tensions in the Middle East and fading Fed rate-hike expectations weigh on the US Dollar.

EUR/USD turns positive, targets 1.1450

EUR/USD now picks up pace and advances toward the 1.1440 region on Friday, up modestly for the day. With no major economic data due, lingering uncertainty over the US-Iran conflict keeps investors cautious, limiting the pair's upside.

Gold remains offered, still below $4,100

Gold struggles to extend Thursday’s rebound and navigates below the $4,100 mark per troy ounce on Friday. Uncertainty surrounding the Middle East conflict limits the precious metal’s upside, which is also under pressure amid rising US Treasury yields across the curve.

Week ahead – US CPI and Warsh testimony to take centre stage, BoC eyed too

US inflation report and Warsh testimony to headline the week. Dollar to dominate amid slew of other US data and Mideast tensions. Amid fresh Iran escalation, China GDP to shed light on Q2 impact. Bank of Canada not expected to follow RBNZ with rate hike.

Five sessions, one round trip: Why the whipsaw is exactly what Warsh ordered

Markets opened July with a December hike as the base case and spent five trading sessions unlearning and relearning it. A 57K payrolls print bled the tightening bets out of the strip; a re-shut Strait of Hormuz is pushing them back in. Wednesday's minutes from the June Federal Open Market Committee meeting landed mid-round-trip, describing a world that had already stopped existing.

Five sessions, one round trip: Why the whipsaw is exactly what Warsh ordered

Markets opened July with a December hike as the base case and spent five trading sessions unlearning and relearning it. A 57K payrolls print bled the tightening bets out of the strip; a re-shut Strait of Hormuz is pushing them back in. Wednesday's minutes from the June FOMC meeting landed mid-round-trip, describing a world that had already stopped existing.