http://www.TheForexNittyGritty.com - Forex Response to Persian Gulf Tension - There does not seem to have been a huge Forex response to Persian Gulf tension, yet. The US and its Western allies have been ratcheting up pressure on Iran to submit its nuclear program to inspections. In fact Iran is under pressure to dump its nuclear program as international agencies believe the purpose of Iran’s program is to develop nuclear weapons. As Iran has become increasingly cut off it has responded with threats to close the Straits of Hormuz.

2. THERE DOES NOT SEEM TO HAVE BEEN A
HUGE FOREX RESPONSE TO PERSIAN GULF
TENSION, YET.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

3. THE US AND ITS WESTERN ALLIES HAVE
BEEN RATCHETING UP PRESSURE ON IRAN
TO SUBMIT ITS NUCLEAR PROGRAM TO
INSPECTIONS.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

4. IN FACT IRAN IS UNDER PRESSURE TO
DUMP ITS NUCLEAR PROGRAM AS
INTERNATIONAL AGENCIES BELIEVE THE
PURPOSE OF IRAN’S PROGRAM IS TO
DEVELOP NUCLEAR WEAPONS.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

5. AS IRAN HAS BECOME INCREASINGLY CUT
OFF IT HAS RESPONDED WITH THREATS TO
CLOSE THE STRAITS OF HORMUZ.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

6. A THIRD OF ALL OIL SHIPPED BY SEA AND
A FIFTH OF ALL OIL TRADED IN THE WORLD
PASSES THROUGH THE 34 MILE WIDE
STRAITS EVERY YEAR.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

7. CURRENCY TRADERS ARE RIGHT TO LOOK
FOR A FOREX RESPONSE TO PERSIAN
GULF TENSION.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

8. HOWEVER, THE ECONOMIC WORRIES AND
EUROPE, ASIA, AND NORTH AMERICA
SEEM TO HAVE TAKEN PRECEDENCE.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

9. THE EURO RALLIED BRIEFLY AS STRONGER
THAN EXPECTED ECONOMIC DATA CAME
OUT OF GERMANY AND CHINA.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

10. OVER THE LONGER HAUL, HOWEVER, THE
EURO IS NOT EXPECTED TO DO ESPECIALLY
WELL.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

11. AUSTERITY MEASURES SUCH AS THE
FRENCH AUSTERITY PLAN AND SIMILAR
MEASURES THROUGHOUT THE CONTINENT
WILL LIKELY LEAD TO STABILIZATION OF
THE EURO ZONE ECONOMY BUT WILL BE A
DISTINCT DRAG ON ECONOMIC GROWTH IN
THE COMING YEAR OR YEARS.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

12. THERE MAY BE A GREATER FOREX
RESPONSE TO PERSIAN GULF TENSION IF
IRAN TAKES ANY STEPS TO IMPEDE
TRAFFIC THROUGH THE STRAITS.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

13. THE US AIRCRAFT CARRIER USS JOHN C.
STENNIS AND ITS BATTLE GROUP ARE
STATIONED IN THE AREA AND, IN
FACT, PASSED THROUGH THE STRAITS
RECENTLY DURING IRANIAN MILITARY
EXERCISES.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

14. IRAN RECENTLY CAPTURED A US STEALTH
DRONE THAT WAS ALLEGEDLY SENT TO
GATHER DATA ABOUT IRANIAN NUCLEAR
DEVELOPMENT.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

15. IRANIAN SCIENTISTS HAVE BEEN
ASSASSINATED AS WELL.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

16. ISRAEL IS ESPECIALLY CONCERNED AS
IRAN HAS NEVER ADMITTED THE NATION’S
RIGHT TO EXIST.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

17. FOR FOREX TRADERS THE CONCERN
WOULD BE THAT THE FOURTEEN OR SO
TANKERS A DAY THAT PASS THROUGH THE
STRAITS WOULD BE IMPEDED AND THE
EFFECT SUCH WOULD HAVE ON THE
WORLD ECONOMY.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

18. PERSIAN GULF OIL STATES, LED BY SAUDI
ARABIA, HAVE PROMISED TO INCREASE
PRODUCTION IN IRAN SHUTS DOWN
PRODUCTION.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

19. HOWEVER, IF THESE NATIONS CANNOT
SHIP THEIR OIL, PRICES WILL LIKELY GO
UP WORLDWIDE.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

20. SKYROCKETING OIL PRICES COULD WELL
DRIVE UP PRICES OF COMMODITIES AND
MANUFACTURED GOODS THROUGHOUT
THE WORLD AND LEAD THE WORLD BACK
INTO THE DEPTHS OF RECESSION.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

21. SKYROCKETING OIL PRICES COULD WELL
DRIVE UP PRICES OF COMMODITIES AND
MANUFACTURED GOODS THROUGHOUT
THE WORLD AND LEAD THE WORLD BACK
INTO THE DEPTHS OF RECESSION.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

22. THINK OF WHO IMPORTS THE MOST OIL
AND THEN IMAGE THEIR CURRENCIES
FALLING AS A FOREX RESPONSE TO
PERSIAN GULF TENSION.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

23. CONFIDENCE IN THE DOLLAR HAS RISEN
OVER THE LAST THREE YEARS.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

24. MANY BELIEVE THAT THIS IS ONLY
BECAUSE THE EURO, ESPECIALLY, HAS
DONE SO POORLY.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

25. BUT, IN REGARD TO A BLOCKAGE OF THE
STRAITS OF HORMUZ, OR OUTRIGHT
HOSTILITIES, THE US IS IN BETTER SHAPE
THAN JUST A FEW YEARS AGO.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

26. THE US HAD REDUCED OIL IMPORTS TO
40% OF CONSUMPTION AND, IN
FACT, RECEIVES THE VAST MAJORITY OF
ITS IMPORTED OIL FROM MEXICO AND
CANADA.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

27. MANY WOULD LOOK TO
EUROPE, CHINA, AND JAPAN AS LARGE
ECONOMIES MORE LIKELY TO SUFFER
FROM A CUT OFF OF OIL COMING OUT OF
THE PERSIAN GULF.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

28. THUS A FOREX RESPONSE TO PERSIAN
GULF TENSION COULD WELL START WITH
NOT ONLY NATIONS MORE DEPENDENT
UPON OIL IMPORTS BUT ALSO WITH
NATIONS IN THEIR SUPPLY CHAINS.
W W W . T H E F O R E X N I T T Y G R I T T Y. C O M

29. FOR MORE INSIGHTS AND USEFUL
INFORMATION REGARDING THE FOREX
MARKETS AND FOREIGN CURRENCY
TRADING, VISIT
WWW.THEFOREXNITTYGRITTY.COM.