Oil Prices Plunge as Iran Signals Nuclear Deal Readiness: Asia-Pacific FX Market Update.

Oil prices plummeted in early Asian trading on May 15, 2025, following remarks from a senior adviser to Iran’s Supreme Leader Ayatollah Ali Khamenei. The adviser announced Iran’s willingness to sign a nuclear agreement, committing to eliminate its highly enriched uranium stockpiles, forgo nuclear weapon development, and allow international inspections in exchange for the immediate lifting of all economic sanctions.

This unexpected geopolitical development sent Brent crude prices tumbling below $70 per barrel, with WTI crude dropping to $66.50, according to real-time market data. The sharp decline reflects market expectations of increased Iranian oil supply if sanctions are lifted, potentially adding 1–1.5 million barrels per day to global markets within months.

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Australian Dollar Surges on Robust Jobs Report

In Australia, the April 2025 employment report delivered a significant boost to the Australian dollar (AUD), which gained 0.4% against the USD, reaching 0.6720. The report revealed 89,000 new jobs, the largest monthly increase in 14 months, with 59,500 full-time positions. The unemployment rate remained steady at 4.1%, near a five-decade low, while the participation rate hit a record 67.1%. Despite this strength, the Reserve Bank of Australia (RBA) is widely expected to cut its cash rate by 25 basis points at its May 19–20 meeting, as inflationary pressures ease. The AUD’s initial spike faded slightly, reflecting cautious market sentiment ahead of the RBA’s decision.

Did You Know?
Iran’s oil exports, despite sanctions, reached 1.5 million barrels per day in 2024, primarily to China, showcasing its resilience in global energy markets.

Broader FX Market Movements

The Asia-Pacific forex market saw modest gains across major currencies. The euro (EUR), British pound (GBP), New Zealand dollar (NZD), and Canadian dollar (CAD) edged higher against the USD, with EUR/USD trading at 1.0450 and GBP/USD at 1.2650. Meanwhile, USD/JPY slipped to 146.00, testing session lows without clear catalysts. Gold prices continued their decline, falling to $2,450 per ounce, as buying support from China waned. U.S. Treasury 10-year yields climbed to 4.55%, a one-month high, fueling debate over whether this reflects optimism for growth or concerns about escalating U.S. debt under proposed tax cuts without offsetting tariff revenue.

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Global Economic Context and Uncertainties

Federal Reserve officials, including San Francisco Fed President Mary Daly, highlighted ongoing economic uncertainty, noting cautious business sentiment despite no immediate recession. Fed Chair Jerome Powell’s upcoming speech later today is anticipated to provide clues on rate policy amid rising yields. In China, reports suggest potential cuts to the reserve requirement ratio (RRR) to stimulate growth, while tightened controls on strategic minerals underscore national security priorities. The APEC trade policy volatility index surged nine times above its 2015–2024 average in April, signaling heightened global trade tensions, which could further influence FX and commodity markets.