US President Donald Trump says new Iran strikes unlikely if talks progress
US President Donald Trump said that it’s “highly unlikely” he will order more strikes on Iran if progress is made in talks over its nuclear program and reopening the Strait of Hormuz, CNN reported on Sunday.
“It depends on whether or not they sign a very strong agreement,” said Trump. “The answer is highly unlikely it will be necessary.” “I would if necessary, but we hit them really hard,” Trump added.
Diplomatic efforts regained attention following last week's US midterm elections, as Qatar, the chief mediator between the US and Iran, stated that Iran was reviewing proposals concerning its nuclear programme.
However, Iranian Foreign Minister Abbas Araghchi said on Sunday that mediators had made no progress or taken any action in recent days since the US elections.
Elsewhere, the Iranian-backed Houthis in Yemen attack damaged one of the landmarks of the Saudi Arabian capital’s financial district. Meanwhile, the offices of oil giant Saudi Aramco suffered minor damage as the city fended off a new barrage of ballistic and cruise missiles on Sunday.
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
FXStreet
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.
