Latest News

Oil and dollar decline on hope for US-Iran Resolution

Asian stocks rose on Tuesday, while oil prices and the safe haven dollar fell. The U.S. claimed it was "continuing to engage" with Tehran in order to reach a deal despite the fact that it had blocked Iran's port after the collapse of the peace talks at the weekend.

A U.S. official stated that there is progress in trying to reach an agreement.

MSCI's broadest Asia-Pacific share index outside Japan rose 1% during early Asia trading, while Japan's Nikkei soared more than 2% and South Korea's KOSPI grew by over 2%.

Following an overnight rally in Wall Street, Nasdaq Futures rose 0.13%, S&P futures remained unchanged, EUROSTOXX50 futures rose 0.63%, and DAX Futures gained 0.77%.

Charu Chanana is Saxo's chief Investment Strategist.

The failed weekend talks didn't produce a deal but they didn't?close the doors on diplomacy. That is enough to allow equities for now to continue pushing higher."

Donald Trump, the U.S. president, said that Iran "called this morning", and "they would like to work out a deal". Could not verify the claim immediately.

In the meantime, the U.S. Military began a blocking of Iran's port in an effort to?put pressure on Tehran.

Trump said that Washington would block Iranian vessels, and any ships who paid such tolls.

The U.S. played the trump card. It's important to me because it forced Iran to open up the Strait, without needing to put boots on the ground", said Tony Sycamore a market analyst with IG.

The Iranians are now forced to rethink their plans.

Brent crude futures fell 2.7% to $96.66 per barrel as the expectations of a resolution overrode concerns about supply disruptions. U.S. crude futures fell 3%, to $96.13 a barrel.

DOLLAR AT THE BACKFOOT

The dollar dropped to a 1-1/2 month low of 98.328 on Tuesday against a basket currency, as a buoyant risk-taking sentiment dampened the demand for world's reserve currency.

The euro was trading at $1.1764, a 0.05% increase. Sterling rose to $1.3514, a six-week high.

"The ?U.S. "The?U.S.

The markets, however, are still facing an economic outlook which is deteriorating. I believe the risk of equity markets, credit markets, and other markets falling again are high, and this would likely push the U.S. Dollar up against all currencies.

The yields on U.S. Treasury bonds were not much different. The two-year yield was at 3.7722%, while the benchmark 10-year rate stood at 4.2854%.

Investors are preparing for the possibility of a number major central banks raising interest rates. This is a dramatic change from what investors expected before the war, when they were expecting rate cuts or an extended pause.

Gold spot was also up 0.7%, at $4,771.81 per ounce.

Bitcoin, the cryptocurrency, increased by 1.5% and now stands at $74,312. Reporting by Rae Wee, Editing by Kevin Buckland

(source: Reuters)