Economy, Business And Markets

Rial Resists $ Dominance

Rial Resists $ DominanceRial Resists $ Dominance

The Rial advanced on Ferdowsi Street on Tuesday, with all currencies and the gold coins retreating as speculation of a possible deal with the West over Iran's nuclear energy program curbed safe haven demand.

Optimism over ongoing negotiations outweighed the resurgence in the US economy and the greenback fell 0.44 percent to 33,810 rials by 13:08 GMT, lowest since Dec. 6.

The Azadi bullion coin lost 0.74 percent and dropped to a three-month low of 9,505,000 rials. Azadi's decline was also helped by gold's fall to a fresh three-month low on Tuesday on renewed expectations of a mid-year hike in US interest rates and as the dollar scaled an 11-year peak.

The euro which sank below $1.08 for the first time in almost 12 years, dipped 1.33 percent to 36,910 rials in Tehran’s currency market, a 2 1/2 year low. The dollar gains have brought into focus a run towards parity that most major banks had not expected until next year, Reuters reported.

The yen remained unchanged in Iran, although it fell in the global arena, burdened by efforts to revive inflation in Japan as well as by the grim outlook for most of the world economy outside the United States.

The Australian dollar sank 0.6 percent to 26,810 rials by 13:08 GMT as an almost five percent fall in factory prices in China drove the Australian dollar to an almost six-year low versus the greenback - another boost to its US counterpart against a basket of major currencies.

Several major banks have forecast the dollar will be worth as much as the euro next year or in 2017. But even allowing for the launch of eurozone’s quantitative easing, Reuters polling shows most had not expected the euro to fall to $1.08 for another six months.

Pressured by the slippage in the price of Brent crude in recent days, the Norwegian Krona fell as much as 1.6 percent to a 13-year low of 8.0607 crowns per dollar and 0.6 percent against the euro to a four-week low of 8.6656 Krona. This sent the Norwegian currency down 1.17 percent to 4,280 rials.