Euro rises, yen jumps as oil falls.
The euro and the yen rose against the dollar on Tuesday after the announcement of a ceasefire between Israel and Iran triggered a sharp drop in oil prices, though investors remained cautious about the outlook in the Middle East.
The European Union and Japan rely heavily on imports of oil and liquefied natural gas, while the U.S. is a net exporter.
U.S. President Donald Trump said on Tuesday that both Israel and Iran violated a ceasefire he announced hours earlier, adding that Iran’s nuclear capabilities were gone.
Iraq said on Tuesday that drones targeted several military sites and bases belonging to Iraqi security forces, highlighting instability in the region.
Oil fell 2.9%, while global shares surged, with the threat to the vital Strait of Hormuz shipping lane seemingly over, but analysts flagged the high level of uncertainty.
“The first piece of uncertainty we face is whether the conflict between Israel, the U.S. and Iran is now over,” said Kit Juckes, macro strategist at Societe Generale (OTC:SCGLY), mentioning reports of further missile launches.
U.S. stock futures rise.
U.S. stock futures rose Tuesday, with sentiment boosted by President Donald Trump’s announcement of a ceasefire in hostilities between Israel and Iran.
By 06:33 ET (10:33 GMT), the Dow Jones Futures traded 294 points, or 0.7%, higher, S&P 500 Futures gained 49 points, or 0.8%, and Nasdaq 100 Futures advanced 225 points, or 1.0%.
The main averages on Wall Street ended the prior session in the green, all registering gains of around 1%, boosted by hopes that U.S. involvement in the days-long Israel-Iran air war would remain relatively contained.
Ceasefire optimism boosts Wall Street
Investors have been boosted by Trump declaring earlier Tuesday, via social media, that the ceasefire between Israel and Iran is now “in effect,” adding that neither side should violate it.
The statement has lifted expectations that the 12-day bout of fighting that included deadly air strikes has now come to an end.
Oil prices slump on Iran-Israel ceasefire.
Oil prices fell sharply Tuesday, extending recent losses after U.S. President Donald Trump announced that a ceasefire had been brokered between Iran and Israel, potentially ending their bitter conflict.
At 08:00 ET (12:00 GMT), Brent oil futures for August fell 3.7% to $67.91 a barrel and West Texas Intermediate crude futures fell 3.7% to $66.01 a barrel.
Both oil contracts settled more than 7% down in the previous session, dropping to a two-week low having rallied to five-month highs after the U.S. attacked Iran’s nuclear facilities over the weekend.
Trump announces Iran-Israel ceasefire
Trump said that Israel and Iran agreed to a “complete and total” ceasefire, and that Iran will begin the ceasefire almost immediately, followed by Israel in 12 hours. adding that the Israel-Iran war will end after 24 hours of the ceasefire remaining in place.
Trump’s announcement was preceded by what was seen as a restrained strike by Iran on a U.S. military base in Qatar. Trump had called the move a “very weak response” to the U.S. attacks on Iran’s nuclear facilities over the weekend.
Oil prices had fallen sharply after the attack, given that there were no reported casualties. Markets were also relieved by Iran choosing to attack the base instead of oil tankers in the Strait of Hormuz.
However, doubts remain over whether the ceasefire will hold after Israel said it had ordered its military to strike Tehran in response to what it said were missiles fired by Iran.
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