Trump says renewed Iran strikes ‘highly unlikely’ if talks progress but warns he could still strike

The statement from Trump indicates a potential de-escalation in tensions between the US and Iran, which could have a positive impact on currency markets. A reduction in geopolitical risk would likely lead to increased investor confidence, particularly in emerging markets and currencies that are highly sensitive to global risk appetite. This could result in a strengthening of currencies such as the euro and other major currencies against the US dollar, as investors become more willing to take on risk.

The progress in talks over Iran's nuclear program and the Strait of Hormuz is crucial in determining the next steps in US-Iran relations. The Strait of Hormuz is a critical waterway for global oil trade, and any disruption to oil supplies could have significant implications for currency markets. If talks progress and tensions ease, it could lead to a decrease in oil prices, which would be beneficial for oil-importing countries and their currencies. On the other hand, if talks break down and tensions escalate, it could lead to higher oil prices and increased volatility in currency markets.

Investors should watch for further developments in US-Iran talks and their impact on oil prices and global risk appetite. Any signs of progress or setbacks in the negotiations could lead to significant movements in currency markets. Additionally, investors should keep an eye on the reaction of other major economies, such as the EU and China, to the developments in US-Iran relations, as their responses could also influence currency markets. The potential for renewed US strikes on Iran remains a significant risk factor, and investors should be prepared for increased volatility in currency markets if tensions were to escalate again.

Originally reported by cnbc.com. CurrencyNews adds analysis for finance & markets readers.