US President Donald Trump announced Thursday he has called off planned military strikes against Iran, citing progress in negotiations toward a final agreement between the two nations. Speaking from the Oval Office, Trump indicated that deal documents are nearing completion, stating “the documents are in pretty final shape, so we’ll see.”
The announcement represents a significant de-escalation in tensions between Washington and Tehran, which have weighed on global markets in recent sessions. Traders had been pricing in geopolitical risk premiums across energy markets and safe-haven assets as military confrontation appeared increasingly likely.
Immediate market reaction is expected to favor risk assets as war premium unwinds. Oil prices may face downward pressure on reduced supply disruption concerns, while equities could rally on diminished geopolitical uncertainty. The dollar and traditional safe havens like gold and Swiss franc may soften as investors rotate back into higher-yielding instruments.
FXnCO Insight
Monitor oil price volatility and consider reducing geopolitical hedges while remaining cautious until deal terms are officially confirmed and signed.
Source: FXStreet