Economy, Business And Markets

Currencies Extend Rally Versus Rial

Currencies Extend Rally Versus Rial Currencies Extend Rally Versus Rial

Foreign currencies extended their rally against the rial on Tuesday, ushered on by unsettling comments from diplomats engaged in the nuclear talks.

The rial retreated in the face of all major currencies on Tuesday, with the dollar advancing 1.64 percent to 33,370 rials by 14:30 GMT.

The United States and Iran inched closer to a political deal that would set the stage for a landmark nuclear agreement, but a US official warned on Monday that Iran must make tough choices to allay fears about its nuclear activities.

US Secretary of State John Kerry and Iranian Foreign Minister Mohammad Javad Zarif held nearly five hours of talks in the Swiss city of Lausanne before the Iranian delegation headed to Brussels for meetings with European ministers.

After the Lausanne talks, a senior US official said it was not clear if an end-March deadline for a framework agreement between Iran and six major powers could be met.

The euro gained slightly more than the greenback. The European currency was up 1.76 percent to 36,550 rials by Tuesday’s close.

Sterling was the main winner of Tuesday’s rally on Ferdowsi Street – the heart of Iran’s foreign exchange. It jumped 2.63 percent to 51,160 rials, clearing the key 50,000 rial level – a line it failed to break through on Monday.

The pound which touched a 20-month low on Sunday after breaking below the 50,000 rial mark, rebounded on the British currency’s rally in the international markets coupled with a general retreat of the rial against major currencies.

Other well traded currencies also gained with the Turkish lira rising 2.27 percent to 13,500 rials by and the Emirati dirham gaining 1.1 percent to 9,150 rials.

Benchmark Azadi bullion coin rose 1.43 percent to 9,300,000 rials by 14:30 GMT on Tuesday, due to gains by the greenback, as gold stalled in international trade.

A strong US currency makes dollar-denominated assets such as gold more expensive for holders of other currencies.

Gold fell to a four-month low on Tuesday on investor jitters ahead of a Federal Reserve policy meeting that may offer further clues to support expectations of a mid-2015 rise in US interest rates.

Spot gold fell as low as $1,142.86 an ounce in earlier trade, its lowest since Nov. 7, and was down 0.5 percent at $1,147.85 by 14:40 GMT.

US gold futures for April delivery were up $1.10 at $1,154.30 an ounce.

Six world powers -- the United States, Germany, France, Britain, Russia and China -- are trying to reach a political framework agreement with Iran by the end of the month that would limit Tehran’s nuclear program in exchange for the lifting sanctions imposed be the United Nations, European Union and the US.

The parties have set a June 30 deadline to finalize all the technical details of an accord. Western officials say privately that overcoming disagreements on some of the remaining sticking points would be very difficult.