Iran Denies Peace Path, Dollar Rebounds
The US dollar strengthened against major currencies after an Iranian parliamentary official dismissed the possibility of negotiations with US President Donald Trump, returning markets to cautious mode amid the ongoing conflict. The Bloomberg Dollar Spot Index rose 0.2%, while the 10-year US Treasury yield rose 2 bps to 4.37%, signaling renewed demand for the dollar amid rising geopolitical risks.
Iranian Deputy Parliament Speaker Ali Nikzad, quoted by the semi-official Fars news agency, said Iran would not restore the Strait of Hormuz to its previous state and refused to negotiate with Trump. This statement came after Trump said on Monday that the US would delay attacks on Iranian energy infrastructure, following what he called "productive talks" with Tehran.
However, the discordant narratives heightened uncertainty. The market considered claims of talks difficult to verify due to Iranian denials, so market participants tended to reduce large positions until there was clarity on the diplomatic pathway and the actual conditions on the ground.
ANZ believes the market will remain cautious as it remains unclear whether the talks are actually taking place. Furthermore, volatility triggered by sudden changes in statements—including social media posts—makes market participants reluctant to take extreme positions before there is stronger confirmation.
The most visible benchmark for the market remains physical conditions: increased shipping traffic in the Strait of Hormuz without incident. As long as shipping flows have not returned to normal, the energy risk premium and demand for safe-haven assets are likely to persist.
In the foreign exchange market, weakening risk sentiment was seen in high-beta currencies. AUD/USD fell 0.3% to 0.6987. USD/JPY rose 0.1% to 158.57. EUR/USD fell 0.2% to 1.1590, and GBP/USD fell 0.2% to 1.3399.
Source: Newsmaker.id
