US President Trump could order a strike on Iran - ABC Australia

Joshua Gibson FXStreet

As reported by ABC News Australia, sources within the Turnbull government say that the US could be prepared to bomb key nuclear strategic targets in Iran as soon as next month.

Key quotes

"The ABC has been told secretive Australian defence facilities would likely play a role in identifying targets in Iran, as would British intelligence agencies. But a senior security source emphasised there was a big difference between providing accurate intelligence and analysis on Iran's facilities and being part of a "kinetic" mission.

"Providing intelligence and understanding as to what is happening on the ground so that the Government and allied governments are fully informed to make decisions is different to active targeting." The top-secret Pine Gap joint defence facility in the Northern Territory is considered crucial among the so-called "Five Eyes" intelligence partners — the US, UK, Australia, Canada and New Zealand — for its role in directing American spy satellites. Analysts from the little-known spy agency Australian Geospatial-Intelligence Organisation would also be expected to play a part.

While some in the Turnbull Government firmly believe Mr Trump is prepared to use military force against Iran, others maintain it might be more bluster, given the consequence of conflict with Tehran might include unpredictable, dangerous responses in the Middle East.

Any US-led strike on Iranian targets would be fraught for a region bristling with tensions. Israel would have reason to be anxious about retaliation, given Iran rejects Israel's right to exist. That said, Israel's Prime Minister Benjamin Netanyahu in April invoked the so-called "Begin Doctrine" that calls on the Jewish state to ensure nations hostile to Israel be prevented from developing a nuclear weapons capability.

"Israel will not allow regimes that seek our annihilation to acquire nuclear weapons," Mr Netanyahu said. An Australian Government source said when it came to Iran, Australia relied on intelligence sourced from its Five Eyes partners, not Israel."

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

GBP/USD loses momentum, flirts with 1.3200

GBP/USD is struggling to maintain its positive bias on Thursday, retreating toward the 1.3200 region in response to the pick in the buying interest around the Greenback. That said, Cable remains under scrutiny as cautious market sentiment keeps investors focused on the US-Iran conflict and political effervescence in the UK.

EUR/USD trims gains, challenges 1.1400

EUR/USD now gives away part of its earlier advance, receding toward the 1.1400 contention zone on Thursday. Meanwhile, the pair’s recovery comes amid extra losses in the US Dollar, at the time when while investors continue to monitor developments in the Middle East and sentiment surrounding global technology stocks.

Gold remains bid and close to $4,100

Gold accelerates its recovery and approaches the key $4,000 mark per troy ounce at the end of the week, adding to Thursday’s advance. However, expectations for a hawkish Fed remain steady and keep the yellow metal’s potential upside contained.

Week ahead: NFP report to challenge Dollar strength and the hawkish Fed

The end of the Middle East conflict and the steps made so far towards securing a comprehensive deal over the next five weeks – with oil prices dropping aggressively but maintaining a small risk premium – has allowed investors to focus elsewhere. Contrary to expectations, the greenback has been the main protagonist lately.

Week ahead – NFP report to challenge Dollar strength and the hawkish Fed

Dollar strength dominates markets, as the hawkish Fed overshadows geopolitics and lower oil prices. NFP week could drive September Fed hike expectations and boost market volatility. The euro lacks fresh bullish catalysts, all eyes on the preliminary inflation report and the ECB Forum.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.