Euro rises as hopes of US-Iran talks send Oil prices tumbling

EUR/USD gathers pace, with the US Dollar under pressure from lower Oil prices and US Treasury yields.
Hopes of reduced Middle East tensions improve on reports of initial headway on a US-Iran diplomatic proposal.
Confidential nuclear inspections and payments tied to frozen Iranian funds reportedly form part of the proposal.

EUR/USD builds on its intraday gains in Tuesday’s American session, with the US Dollar (USD) and US Treasury yields coming under pressure as Oil prices reverse sharply. The moves follow reports of headway towards restarting US-Iran negotiations. The pair is trading near 1.1251 at the time of writing, a gain of 0.35% for the day.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

A proposal put forward by Pakistan’s army chief to senior Iranian officials has secured US approval and Iran’s preliminary agreement, according to Israel’s Channel 12 News. Under the reported plan, interest earned on $6 billion in Iranian funds frozen in Qatari banks would be transferred to Tehran. This would partly meet Iran’s demand for the return of its frozen assets.

Citing a Qatari report, Channel 12 added that Iran had agreed under the proposal to allow the International Atomic Energy Agency (IAEA) a confidential visit to its nuclear facilities. No public announcement of the visit would be made.

Earlier, Qatar’s Foreign Ministry spokesperson Majed al-Ansari had said talks between Iran and the United States were continuing, notwithstanding mounting tensions and concerns that fighting could resume. The reports come after those remarks.

West Texas Intermediate (WTI) Oil has slipped back to about $95.65 in the wake of the reports, having briefly exceeded $100 earlier in the day. At around 101.55, the US Dollar Index (DXY) is at its lowest since 1 October. The index, which measures the Greenback against a basket of six major currencies, is extending its retreat from last week’s 18-month high near 103. Meanwhile, the benchmark 10-year US Treasury yield is near 5.08%, a decline of 6 basis points on the day.

The prospect of diplomatic headway between the United States and Iran has raised some hopes that shipping through the Strait of Hormuz could recover. Conditions nevertheless remain fragile. Houthi attacks on Saudi energy infrastructure, together with a steep increase in attacks on vessels transiting the strait, continue to heighten supply risks and sustain inflation concerns.

How Is the Euro Performing Today?

The Euro’s strongest performance today was against the US Dollar. The table below sets out the percentage changes in the Euro (EUR) against the major currencies listed.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.29%	-0.61%	-0.32%	-0.44%	-0.44%	-0.43%	-0.17%
EUR	0.29%		-0.34%	-0.02%	-0.15%	-0.14%	-0.14%	0.12%
GBP	0.61%	0.34%		0.34%	0.22%	0.22%	0.20%	0.45%
JPY	0.32%	0.02%	-0.34%		-0.14%	-0.11%	-0.14%	0.14%
CAD	0.44%	0.15%	-0.22%	0.14%		0.02%	0.01%	0.27%
AUD	0.44%	0.14%	-0.22%	0.11%	-0.02%		-0.00%	0.26%
NZD	0.43%	0.14%	-0.20%	0.14%	-0.01%	0.00%		0.27%
CHF	0.17%	-0.12%	-0.45%	-0.14%	-0.27%	-0.26%	-0.27%

Percentage movements between the major currencies are displayed in the heat map. Select the base currency from the left-hand column and the quote currency from the top row. For instance, choosing the Euro on the left and following that row across to the US Dollar gives the percentage change for EUR (base)/USD (quote) in the corresponding cell.