Iran’s Baghaei: Constant change of US positions and Iran-Lebanon conflicts cade delay in deal
Iran's Foreign Ministry spokesperson Esmail Baghaei said in the European session on Monday that ‘aggressive action' by the United States (US) is a ceasefire violation, and it led Iranian armed forces to target positions from which US attacks originated.
On Israel-Lebanon conflicts, Iran’s Bahgaei said, “Ceasefire in Lebanon is integral part of any agreement to end war with US.” Bahgaei also condemned Washington’s revised terms of a peace deal, warning that they are causing a delay in the deal's finalization. “Lack of trust, constant change of positions by US and Israeli actions in Lebanon are causing delay in diplomatic process,” Baghaei said.
Regarding Iran’s attacks on Kuwait, Baghaei said, “Kuwait should clarify as soon as possible the situation of four detained Iranian citizens.”
Meanwhile, Kuwait’s Foreign Ministry also condemned Iranian attacks on its territory, saying they have “undermined efforts to reduce tensions in the region and affirmed that it has the full right to take all necessary measures to defend its territory”.
Market reaction
There seems to be no impact of Iran Baghaei's comments on risk-sensitive assets and the US Dollar (USD).
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.
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