Iran's Foreign Minister Abbas Araghchi denied recent reports of direct communication with U.S. envoy Steve Witkoff, stating their last contact occurred prior to the U.S. military strike on Iran on February 28. The denial comes amid heightened tensions between the two nations, with the U.S. accusing Iran of supporting regional proxy groups while Iran denies involvement. The incident underscores ongoing geopolitical risks in the Middle East, which have historically impacted global markets through oil price volatility and trade disruptions. For forex and U.S. markets, the denial could influence investor sentiment, particularly in USD/IRR and EUR/USD pairs. Geopolitical uncertainty often drives risk-off behavior, pushing capital into safe-haven assets like the U.S. dollar. Traders may also monitor oil price movements, as Middle East tensions typically affect crude markets. The U.S. equity market could see mixed reactions, with defense stocks potentially benefiting from increased military activity. Looking ahead, investors should watch for further diplomatic developments between Iran and the U.S., including potential sanctions or negotiations. Regional investors in the Gulf may need to assess how prolonged tensions impact trade routes and energy exports. Central banks in the Middle East might also adjust monetary policies in response to currency fluctuations linked to geopolitical risks.

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