Economy, Business And Markets

Rial Down, Azadi Up

Rial Down, Azadi UpRial Down, Azadi Up

The rial fell versus all major currencies and the Azadi gold coin on Wednesday, as reports of a phased deal over Iran's nuclear program taking shape, led investors towards foreign exchange.

AP said the US and Iran are shaping the contours of a deal that would initially freeze Tehran's nuclear program but would allow it to slowly ramp up nuclear activities over the last years of the agreement's duration, and lead to a slow easing of economic sanctions against Iran. The market was hoping for a quicker deal.

The US dollar was up 0.17 percent to 34,360 rials by 11:54 GMT on Wednesday, while the euro rose 0.28 percent to 39,330 rials and sterling hit 53,280 rials rising 0.51 for the day.

The Azadi also rose 0.77 percent to 9,875,000 rials bolstered by international gains by the precious metal. The bullion coin is rebounding from a three-month low.

Azadi had international backing as gold edged higher on Wednesday after dropping to a seven-week low the session before, with Federal Reserve Chair Janet Yellen indicating flexibility in raising US interest rates.

Yellen said on Tuesday that while the Fed is preparing to consider rate hikes on a "meeting-by-meeting basis", an increase is not likely for at least the next couple of meetings.

Spot gold was up just shy of a percentage point at $1,208.90 an ounce by 11:54 GMT, after hitting its weakest since Jan. 5 on Tuesday at $1,190.91. US gold for April delivery gained 0.95 percent to $1,208.70 an ounce. Silver, both spot and futures, rose more than one percent.

A US rate hike, the first since 2006, reduces the appeal of non-interest bearing assets such as gold. Yellen's comments before a Senate Banking Committee suggest that the US central bank appears largely on track to increase interest rates by midyear as many in the market expect.