Leave it to President Trump to cause a market mover in the EUR/USD yesterday when he shared that he was not in the mood to negotiate with Iran. According to FXStreet, a financial media publication, the President’s sentiments helped drive the EUR/USD below 1.1500 indicating a move to safe-haven assets including, ironically, the US dollar.
My bet yesterday was that the EUR/USD would close above 1.1520 by 3pm yesterday. The NADEX EUR/USD>1.1520 contract expired at 3pm at a price of 1.14794.
Today’s media reports are not supporting any notions of a quick resolution as the American and Iranian leadership make public their posturing on negotiations. Newsweek reports that Iran’s Ayatollah Khamenei has warned Mr. Trump that any U.S. military intervention will be met with irreversible repercussions while the American president is calling for unconditional surrender. Mr. Trump has also indicated that while the U.S. has knowledge as to the Ayatollah’s whereabouts, that the U.S. has no present intention of permanently removing him.
Newsweek also reports that Hamas has been warning the United States of the consequences of further military involvement in the conflict while other Muslim and Arab nations have reportedly condemned Israel for its attack on Iran.
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My initial read of the energy being reported on in the press is that this conflict will not escalate and for event contract (binary options) purposes, we will see the price of the euro start inching back up. In my opinion, Middle East proxies have always carried a big bark with little bite especially when addressing the United States and the West. Middle East nations and their proxies have followed a decades long policy of focusing on regional issues, thus containing disagreements and conflicts to the region.
Given that the real information and negotiations are walled off from us average Joes, we should not rule out that the stakeholders in this conflict have no intent to prolong the conflict. The Ayatollah can warn of irreversible consequences resulting from US military intervention because he already knows that there will be no military intervention.
Mr. Trump can bluster about permanently removing the Ayatollah knowing that he will not follow through because he has no intention of turning off his base of supporters, a significant portion that has no stomach for endless wars and elected him in part on that narrative.
As a side note, I think in the longer run that Israel and specifically Israel’s currency is the loser in all this. The ire it is drawing from its adventures in Gaza and the deployment of resources in Iran for the expressed purpose of clearing a path to Tehran will cost the Israeli state as a currency union.
Alton Drew
18 June 2025
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