U.S.-Iran Agreement Enters Signing Stage, Bullish Dollar Bets Hit Highest Level Since Last Year

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Summary:

The text of the U.S.-Iran memorandum of understanding has been finalized and will be signed on June 19; traders' bullish bets on the U.S. dollar have climbed to the highest level in more than a year.

Highlights

1. Text of the U.S.-Iran memorandum of understanding finalized, signing scheduled for June 19.

2. Key provisions of the draft U.S.-Iran memorandum revealed.

3. Israel says the U.S.-Iran memorandum threatens its security interests.

4. Strait of Hormuz to reopen after the agreement is signed on Friday.

5. Preliminary University of Michigan Consumer Sentiment Index rises to 48.9 in June.

6. Kazimir: Further rate hikes are necessary to combat inflation.

7. Traders' bullish positioning on the U.S. dollar reaches the highest level in more than a year.

Details

Text of U.S.-Iran Memorandum Finalized, Signing Set for June 19

Iran's National Security Council announced that the text of the memorandum of understanding between Iran and the United States has been finalized. According to the council, both sides will officially sign the document on June 19.

Beginning on the evening of June 15, all military operations on every front, including Lebanon, will cease immediately and permanently. The maritime blockade imposed on Iran will also be lifted in full without delay.

The council added that negotiations on a final agreement will begin only after the other party has effectively implemented the commitments outlined in the memorandum.

Key Terms of the Draft Memorandum Revealed

The draft calls for an immediate and permanent ceasefire on all fronts, including Lebanon. The United States pledges not to interfere in Iran's internal affairs and to respect the sovereignty of the Islamic Republic of Iran.

Washington will fully lift the maritime blockade on Iran within 30 days and withdraw military forces deployed around Iran. Management of the Strait of Hormuz will be entrusted to Iran, and navigation through the waterway will resume within 30 days.

Sanctions on Iranian oil, petrochemical products, and related derivatives will be suspended, allowing Iran full access to its frozen funds and assets.

The United States and its allies are required to provide at least $300 billion in reconstruction assistance to Iran. Both sides will hold 60 days of negotiations to finalize a comprehensive nuclear agreement, fully remove U.S. primary and secondary sanctions, and lift sanctions imposed under relevant United Nations Security Council and IAEA Board of Governors resolutions.

Iran reaffirmed its commitment to the Nuclear Non-Proliferation Treaty and pledged not to develop nuclear weapons. During the 60-day negotiation period, the United States will refrain from deploying additional troops to the region and from imposing new sanctions.

Iran's $24 billion in frozen assets will be gradually released during the talks, with half of the funds to be transferred before negotiations officially begin. A dedicated mechanism will be established to oversee implementation of the agreement.

The final accord will require confirmation through a United Nations Security Council resolution. Preconditions for launching final negotiations include the release of half of Iran's frozen assets, suspension of oil-related sanctions, and the removal of the maritime blockade.

The final agreement will focus only on three areas: the handling of enriched materials and uranium enrichment activities, sanctions relief, and Iran's economic reconstruction. Iran's missile program and its support for resistance groups are excluded from the agenda.

Israel Says the Memorandum Threatens Its Security Interests

Israel's Channel 12 reported on June 13, citing several senior Israeli officials speaking anonymously, that a possible memorandum between Washington and Tehran would undermine Israel's security interests.

According to the report, the imminent agreement suggests that the United States has accepted Iran's major demands, adding that Iran would not agree to such a deal without receiving substantial concessions.

Israeli officials and experts reportedly believe that the framework of the memorandum poses risks to Israel's security. They also noted that Iran agreed to discuss its nuclear program only after the war formally ends and several conditions—including the release of frozen Iranian assets—are fulfilled.

Strait of Hormuz to Reopen Following Friday's Signing

U.S. President Donald Trump said the agreement would bring peace and security to the entire region.

Trump noted that previous U.S. presidents had attempted unsuccessfully to reach peace agreements with Iran. He said regional leaders have finally found a president capable of delivering genuine peace.

He also announced that the Strait of Hormuz would reopen for oil shipments after the agreement is signed on Friday, allowing energy supplies to flow again throughout the region and the world.

U.S. Consumer Sentiment Improves in June

U.S. consumer confidence rose for the first time in four months in early June, as lower gasoline prices provided some relief to households facing elevated inflation.

The preliminary University of Michigan Consumer Sentiment Index increased to 48.9 in June from May's record low of 44.8, exceeding economists' expectation of 46.

Consumers expect prices to rise 4.6% over the next year, down from 4.8% in May.

Survey Director Joanne Hsu said gasoline prices continue to have a significant impact on consumers. Although conditions have improved somewhat, current fuel prices remain broadly unacceptable to households and continue to weigh on perceptions of the economy.

Kazimir: Further Rate Hikes Needed to Fight Inflation

European Central Bank Governing Council member Peter Kazimir said inflationary pressures spreading throughout the economy will require additional rate hikes.

He argued that price pressures will not ease without policy intervention and noted that even a peace agreement between the United States and Iran would not bring inflation back to the ECB's 2% target overnight.

Although economic growth has moderated, the economy remains resilient enough to provide policymakers with room to act.

"Our job is not finished," Kazimir said. "It is too early to discuss whether policy needs to become more restrictive, but I certainly would not rule out that possibility."

He added that June inflation data, particularly core inflation, could prove decisive, while the outlook for July remains uncertain. New projections will become available in September, and decisions should continue to be made on a meeting-by-meeting basis.

Bullish Dollar Bets Reach Highest Level in More Than a Year

As the conflict in the Middle East reinforces the U.S. dollar's status as a safe-haven currency, traders' bullish sentiment toward the greenback has climbed to its highest level in more than a year.

According to data released by the U.S. Commodity Futures Trading Commission (CFTC), hedge funds, asset managers, and other speculators held a combined $27.8 billion in bullish dollar positions as of June 9, the highest level since February 2025.

The increase in positioning suggests growing confidence in the world's primary reserve currency. Since the conflict erupted in late February, the dollar has strengthened steadily and has shown heightened sensitivity to surging oil prices.

Today's Focus

15:00 GMT — Switzerland May Consumer Confidence Index

15:15 GMT — ECB President Christine Lagarde speaks

15:50 GMT — ECB Executive Board member Piero Cipollone speaks

21:15 GMT — U.S. May Industrial Production MoM

22:00 GMT — ECB Governing Council member Klaas Knot speaks

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