• The U.S. dollar rose to its highest level this year against a basket of currencies on Tuesday due to worries about political turmoil in Italy before paring some gains on a U.S. decision to withdraw from the international nuclear deal with Iran.
The dollar’s run-up stalled ahead of President Donald Trump’s announcement that the United States was pulling out of the 2015 deal, which eased economic sanctions in exchange for Tehran limiting its nuclear program. Trump said he would reimpose the sanctions.
The index that tracks the greenback versus the euro, yen, sterling and six other currencies earlier on Tuesday hit 93.280, its highest level since December. It was last up 0.4 percent at 93.100 in late U.S. trading.
The euro declined 0.5 percent to $1.1860 after hitting $1.1836 earlier, its weakest level since late December, Reuters data showed.
• US withdraws: Trump said the US will pull out of the Iran deal.
What's in the deal: In exchange for limits on its nuclear activities, Iran would get relief from sanctions while continuing its atomic program for peaceful purposes.
• A senior State Department official acknowledged to reporters the US did not discuss any “Plan B” with European partners ahead of President Trump’s announcement Tuesday that the US would be pulling out of the Iran nuclear agreement.
“We did not talk about a Plan B because we were focused on negotiating a supplemental agreement,” the official said. “So we did not – we did not talk about Plan B.”
• The official said that while the US and European partners made a “ton of progress” in attempting to reach a supplemental agreement that would satisfy President Trump ahead of the May 12 waiver deadline, they were not able to resolve the sticking point presented by the sunset issue.
The same official said sanctions would be implemented in two phases with the intention of giving countries and companies time to adjust:
- Six-months for energy-related sanctions and sanctions ancillary to that (CBI, shipping, etc.), as well as relisting designated companies
- And 90-days for other Joint Comprehensive Plan of Action sanctions and civil aviation licenses.
All JCPOA-related sanctions waivers are pulled today, including those that were set to expire on July 11, so today is the start of both “wind down” periods.
• Saudi Arabia says it "supports and welcomes" President Trump's decision to pull the US out of the Iran deal, and backs his plan to reinstate sanctions on the regime.
Saudi Arabia, in a statement, also said: The Kingdom reaffirms its support of the strategy previously announced by President Trump towards Iran, and hopes the international community will take a firm and unified stance against the Iranian regime, and its destabilizing aggression in the region, its support to terrorist groups, particularly Hizbollah and the Houthis militias, and its support of the Assad regime—who has committed heinous crimes against its people that led to the death of more than half a million civilians, including through the use of chemical weapons.
• Both Washington’s European allies and Tehran pledged on Tuesday to uphold the 2015 Iran nuclear deal despite President Donald Trump’s decision to pull the United States out and reimpose sanctions.
• Syrian state media accused Israel of launching missiles at a target near Damascus on Tuesday, shortly after U.S. President Donald Trump announced he was quitting the Iranian nuclear deal, a move that had prompted Israel to go on high alert.
The Israeli military said that, upon identifying “irregular activity” by Iranian forces in Syria, it instructed civic authorities on the Golan Heights to ready bomb shelters, deployed new defenses and mobilized some reservist forces.
• U.S. Secretary of State Mike Pompeo was on his way to North Korea on Tuesday to prepare for an unprecedented summit with North Korean leader Kim Jong Un as President Donald Trump signaled the possibility that three Americans detained there could soon be released.
• The leaders of China, Japan and South Korea meet in Tokyo on Wednesday in a powerful gesture of solidarity against the backdrop of historic diplomatic moves by North Korea and a push for the isolated country to give up its nuclear weapons.
Last held in Seoul in 2015, the three-way summit has regularly brought together the neighbours, but this week’s gathering comes amid an unusual period of calm for ties often beset by territorial and historical disputes.
As U.S. President Donald Trump steps up trade pressure on China and Japan, the talks could provide an opportunity for improving regional unity, said Katsuhiko Nakamura, an official of a private think-tank in the Japanese capital.
• Cyber actors affiliated with Russia’s government conducted an “unprecedented, coordinated” campaign against the U.S. election infrastructure, a U.S. Senate committee said on Tuesday, including successfully penetrating a few voter registration databases.
The cyber attacks targeted at least 18 states, and possibly three more, the U.S. Senate Intelligence Committee said in an unclassified summary of the first instalment of a report on possible Russian meddling in the 2016 election.
It said it found “ample evidence” that the Russian government sought to undermine confidence in the U.S. election infrastructure and warned of continuing vulnerabilities and the possibility of more attacks to come.
• The Bank of England will wait until August before raising interest rates, according to a Reuters poll in which nearly all economists pushed back previous expectations of a hike on Thursday.
That dramatic turnaround from a poll taken just a few weeks ago was triggered by dovish comments from BoE Governor Mark Carney, together with a slew of downbeat data suggesting Britain’s economy is barely growing.
All but three of the 62 economists polled from May 3-8 expect no move from 0.5 percent this month - a complete reversal from an April 18 poll when 69 of 76economists had a 25 basis point increase pencilled in for May 10.
Just under a third of economists polled now expect no change in August either.
• Crude oil prices ended down about 2.0 percent on Tuesday, but off the lows for the day, after President Donald Trump confirmed the U.S. will withdraw from the deal with Iran to curb its nuclear program.
Brent crude futures LCOc1 settled 1.7 percent lower at $74.85 a barrel while U.S. West Texas Intermediate (WTI) crude futures CLc1 ended the session 2.4 percent lower at $69.06 per barrel.
• Iran’s exports of oil to China, Europe and other countries will decline later this year and into 2019 if the United States can enforce President Donald Trump’s decision to reimpose the “highest level” of economic sanctions targeting oil trade with Iran.
Reference: Reuters, CNBC, CNN
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