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Middle East War updates: Iran says Strait of Hormuz main focus of talks to end war with US

FXStreet · 2026-10-04T22:38:48Z
Middle East War updates: Iran says Strait of Hormuz main focus of talks to end war with US

Here’s a brief recap of the key developments in the Middle East war that occurred over the weekend, which are expected to have a significant impact on markets in the upcoming week.

  • The Pentagon said that the US military evacuated a dozen B-1 bombers from the RAF Fairford airbase in the United Kingdom (UK) over the weekend after attack threats from Iran, per Axios.
  • Israeli Prime Minister Benjamin Netanyahu stated that the country gave the UK intelligence that pointed to a threat of an Iranian attack.
  • The United Kingdom Maritime Trade Operations (UKMTO) reported incident 60NM south of Al Mukha, Yemen. The agency reported that a tanker sighting multiple explosions occurring near the vessel. All crew members are believed to be safe, and no environmental damage has been reported.
  • Iran’s Foreign Ministry spokesman Esmaeil Baqaei said on Sunday that the Strait of Hormuz is the main focus of Iran’s negotiations to end the war with the United States (US).
  • Baqaei added that the latest US proposal to Iran to end the war was almost identical to previous proposals, adding that Washington continues to focus on the nuclear file.
  • Iranian parliament speaker Mohammad Bagher Ghalibaf said that Washington quietly sent new peace proposals through intermediaries. He added that Tehran is not backing down from its conditions for opening the critical waterway, denouncing recent alleged US proposals as “unilateral demands.”
  • “The Strait of Hormuz will not be opened until our seven conditions—based on the Islamabad Memorandum—are met,” said Ghalibaf.
  • Fars news reported Iran plans to enhance missile range after war with the US. “During this war, we concluded that we absolutely must increase the range of our missiles, and we have now moved in that direction,” said Iran’s Army spokesperson Mohammad Akraminia.
  • The Saudi Arabia-backed chairman of Yemen’s Presidential Leadership Council, Rashad al-Alimi, announced the start of military operations to retake the remaining territory held by the Houthis and restore state authority across the country.
  • Yemen's Iran-aligned Houthis claimed responsibility for an attack on Aramco’s facilities in the Saudi capital Riyadh. The group said the attack was in retaliation for Saudi attacks on Yemen's Sanaa and other provinces. Reuters reported a large plume of smoke and fire was seen rising in the vicinity of an Aramco facility earlier on Saturday.

Risk sentiment FAQs

In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.

Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.

The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.

The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.