US dollar faces crisis of confidence

In times of market panic investors tend to rush to the safety of greenback, but when stocks swooned in response to US tariffs this week, they ran away from it. Investors say it's a sign that the greenback’s global standing may be eroding.

There is perception that greenback has an inherent competitive advantage. It's backed by the world's largest economy, the deepest capital markets and an established rule of law. There is no real alternative in the near term. However, after the trade war initiated by Donald Trump the creation of an alternative currency seems certain.

The dollar, for decades a safe haven, on Thursday fell about 1.7% in its biggest daily drop since November 2022, after President Donald Trump imposed tariffs on imports at levels not seen since the early 1900s. Stock markets also tanked, as tariffs ignited recession worries.

In interviews and published markets commentaries, many investors and analysts pointed to the Trump administration for the anomaly. Its protectionist policies, upending of the global economic order in place since World War II, and a growing US debt pile have been chipping away at the dollar's appeal, they say. Left unchecked, a crisis of confidence in the dollar could also undermine its position as the world's reserve currency, they added.

"What we're seeing today is a further indication that the structure and nature of the US dollar’s relationship to global markets has changed," said Thierry Wizman, global foreign exchange and rates strategist at Macquarie in New York.

"There's an underlying basis for this, which is the changing role of the US in the world."

Any erosion of the dollar's standing as a safe-haven is bad news for investors and policymakers - at least in the near term.

For investors, who have piled trillions of dollars into buoyant US markets in recent decades, a sharp dollar fall could result in higher interest rates for longer. That's because price pressures at home could make it harder for the Federal Reserve to cut rates.

A rapid strengthening of currencies against the dollar is a headache for other central banks navigating a weaker economic outlook, as it makes their exports more expensive and potentially harder for them to revive growth. The euro, for example, just had its best day against the greenback in more than two years.

The recent depreciation in the dollar showed that concerns about the currency's status had "left footprints in financial markets already," Sweden's central bank deputy governor Per Jansson said at an event in London on Tuesday.

"If the dollar's status would change, that would be a big change for the world economy ... and would basically create a mess," he told Reuters afterwards. "I really do not hope the US goes there."

 

 

OPEC+ agree to ramp up output in May

According to the Saudi Gazette, Saudi Arabia, Russia and six other OPEC+ countries, agreed on Thursday to boost oil supply in May 2025. The OPEC+ countries, which also include Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman, agreed to raise production by 411,000 barrels per day (bpd) in May.

The OPEC+ countries had been scheduled to raise output by 135,000 bpd in May as part of a plan to gradually unwind their most recent layer of output cuts. But after a meeting of the eight countries held virtually on Thursday, the group announced it would boost output by 411,000 bpd in May. OPEC attributed this to continuing healthy market fundamentals and the positive market outlook.

The group emphasized that these gradual increases could be paused or reversed depending on market conditions, with the flexibility intended to help stabilize oil prices. "This comprises the increment originally planned for May in addition to two monthly increments," OPEC said in a statement referring to the volume. "The gradual increases may be paused or reversed subject to evolving market conditions," it said.

The OPEC+ meeting on Thursday reviewed global market conditions and outlook. "In view of the continuing healthy market fundamentals and the positive market outlook, and in accordance with the decision agreed upon on December 05, 2024, and subsequently reaffirmed on March 03, 2025, to start a gradual and flexible return of the 2.2 million barrels per day voluntary adjustments starting from April 01, 2025, the eight countries will implement a production adjustment of 411000 bpd, equivalent to three monthly increments, in May 2025," the statement said.

"The gradual increases may be paused or reversed subject to evolving market conditions, and this flexibility will allow the group to continue to support oil market stability. The eight OPEC+ countries also noted that this measure will provide an opportunity for the participating countries to accelerate their compensation," the statement noted.

The OPEC+ countries reaffirmed their commitment to the voluntary production adjustments agreed at the 53rd JMMC meeting on April 03, 2024. They also confirmed their intention to fully compensate any overproduced volume since January 2024 and to submit updated front-loaded compensation plans to the OPEC Secretariat by April 15, 2025.

Persian Gulf Arabs oppose US attack on Iran

In a commentary on March 31, the British newspaper the Guardian wrote an article saying that the Persian Gulf Arab states are opposed to a possible US attack on Iran’s nuclear facilities, believing it will make the Middle East region more insecure.

“Widespread rejection in the Persian Gulf of a US-inspired attack on Iran’s nuclear facilities is a relatively new factor in the equation, and Trump’s plan to reportedly visit Saudi Arabia on his first overseas trip means he may personally hear strong opposition to an attack on Iran from the Saudi crown prince, Mohammed bin Salman,” the Guardian wrote.

The following is the text of the article titled “Trump’s bombing threat over Iran nuclear program prompts backlash”:

Iran has reacted with outrage after Donald Trump said the country will be bombed if it does not accept US demands to constrain its nuclear program.

The US president said on Sunday that if Iran “Doesn’t make a deal, there will be bombing. It will be bombing the likes of which they have never seen before.”

Trump’s latest threat – more explicit and violent than any made before – came after he sent a letter to Iran, as yet undisclosed, offering to hold talks on its nuclear program. Iran had sent a reply to the US stating it was willing to hold indirect talks, officials confirmed.

Esmail Baghaei, the Iranian foreign ministry spokesperson, said of Trump’s threat, “The explicit threat of bombing Iran by the head of a country is clear contradiction to the essence of international peace and security.

“Such a threat is a gross violation of the United Nations charter and a violation of the International Atomic Energy Agency safeguards regime. Violence brings violence and peace creates peace, America can choose.”

The Leader, Ayatollah Ali Khamenei, a sceptic about talks with the US, said Iran was not overly concerned by Trump’s words. “We consider it unlikely that such harm would come from outside. However, if any malicious act does occur, it will certainly be met with a firm
and decisive response,” he said.

Brig. Gen. Amir Ali Hajizadeh, the commander of the Revolutionary Guard’s aerospace force, said, “Someone in glass houses does not throw stones at anyone,” adding: “The Americans have at least 10 bases with 50,000 troops in the region, meaning they are sitting in a glass house.”

But the Iranian foreign minister, Abbas Araghchi, clearly had authority to keep the prospect of talks alive, saying Iran had already replied to the Trump letter through intermediaries in Oman and adding he knew the Iranian letter had now reached the US. Araghchi said direct talks were not possible while the US continued to threaten and bully Iran.

Trump sent his original letter proposing talks through the United Arab Emirates’ senior diplomatic envoy, Anwar Gargash.

Trump has set a deadline of mid-May for progress to be made, but a longer deadline also exists of mid-August, by which time the original 2015 nuclear agreement will largely expire and a European response will be required. Trump took the US out of that agreement in 2018, a move widely seen as a mistake since it led Iran to speed up its uranium enrichment program.

That Iran sent its reply through Oman, its traditional chosen mediator, rather than the UAE may suggest Iran does not want the UAE – which has normalized relations with Israel – to act as intermediaries. The US and Iran had held indirect talks on reviving the nuclear agreement under the Biden administration in Vienna from 2021, but they fizzled out, and all sides agreed the indirect nature of the talks ate up time, something Trump is reluctant to offer Iran.

Some of the ground will have been covered in four rounds of parallel talks held between Iranian and European negotiators in Geneva.

Tehran has not commented on how broadly the Trump letter went in demanding concessions from Iran. But the Iranian ambassador to Iraq, Mohammad Kazem al-Sadegh, indicated the US was seeking talks that went wider than the nuclear program, saying the letter called for the disbandment of the Iranian-backed Iraqi Popular Mobilization Forces militia.

The US administration has been divided over whether to simply demand Iran expose its civil nuclear program to fuller international inspection, or make a wider set of demands including a complete end to its nuclear program and an Iranian commitment to stop backing resistance groups in the Middle East such as Hamas in Gaza and the Houthis in Yemen.

The US national security adviser, Mike Waltz, has called for the “full dismantlement” of the Iranian nuclear program, something Tehran rejects. By contrast, Steve Witkoff, Trump’s special envoy, spoke only of restricting Iran’s nuclear program, something Iran has been willing to accept since 2015 so long as it leads to a lifting of sanctions on the Iranian economy.

Kamal Kharazi, the head of Iran’s Strategic Council on Foreign Relations and sometimes touted as a chief negotiator, has accused the US of operating a psychological war by adopting a policy of “either war or negotiation”.

Widespread rejection in the Persian Gulf of a US-inspired attack on Iran’s nuclear facilities is a relatively new factor in the equation, and Trump’s plan to reportedly visit Saudi Arabia on his first overseas trip means he may personally hear strong opposition to an attack on Iran from the Saudi crown prince, Mohammed bin Salman.

The Persian Gulf’s opposition to an attack on Iran is based not on close ideological affinity with Iran, but on a sense the region must avoid further political instability.

کیا امریکہ ایران پربراہ راست حملہ کرے گا یا اسرائیل کو استعمال کرے گا؟

صدرڈونلڈ ٹرمپ کی اس دھمکی کے بعد کہ امریکہ ایران پر براہ راست حملہ کرسکتا ہے اکثرماہرین کا موضوع گفتگو ہے: کیا امریکہ کے لیے یہ مناسب ہے کہ وہ ایران پر براہ راست حملہ کرے یا اسرائیل کو بطور پراکسی استعمال کرے؟

ایران پر براہ راست امریکی حملہ یا اس کے اسرائیل کے ذریعے بالواسطہ حملہ کے نتائج کتنے خوفناک ہوں گےاس کے بارے میں کچھ کہنا ممکن نہیں۔ تاہم زیادہ تر تجزیہ کار اس بات پر متفق ہیں کہ دونوں میں سے کوئی بھی طریقہ استعمال کیا جاۓ نتائج انتہائی خطرناک ہو سکتے ہیں۔

ایران پر براہ راست امریکی حملے کے ممکنا نتائج:

براہ راست حملہ پورے خطے کو جنگ کی لپیٹ میں لے سکتا ہے، جس میں علاقائی اورعالمی طاقتیں بالخصوص روس اورچین شامل ہو سکتی ہیں۔

ایران فوری جوابی کارروائی کے ذریعہ تیل کی سپلائی میں خلل ڈال سکتا ہے جس سے توانائی کی قیمتیں آسمان کو چھو سکتی ہیں۔

ایران کے پاس مضبوط علاقائی پراکسیز (حزب اللہ، حوثی، اور عراق اور شام میں ملیشیا) ہیں جو امریکی مفادات، فوجی اڈوں، سفارت کاروں اور اتحادیوں کو نشانہ بنا سکتی ہیں۔

بذات خود امریکیوں کا ردعمل سخت ہوسکتا ہے۔ یہ بات تو روز روشن  کی طرح عیاں ہے امریکیوں میں جنگ سے نفرت بڑھتی جارہی ہے۔ وہ چاہتے ہیں کی جنگوں پر خرچ ہونے والے اربوں ڈالرامریکیوں کی فلاح و بہبود پر خرچ کیۓ جائیں۔

ماہرین کی وارنگ ہے کہ بغیر کسی اشتعال انگیزی کے ایران پر براہ راست یکطرفہ امریکی حملہ کا قانونی اور سفارتی جواز نہیں بنتا اوریہ بین الاقوامی قوانین کی خلاف ورزی ہوگا اور امریکی ساکھ کو نقصان پہنچاۓ گا۔

اسرائیل کے ذریعے پراکسی حملہ:

ایران پراسرائیل کا پراکسی حملہ امریکہ کو کسی حد تک یہ کہنے کا موقعہ دے گا کہ یہ اسرائیل کا عمل ہے۔ تاہم ہر کوئی جانتا ہے کہ اسرائیل کا کوئی بھی حملہ امریکہ کی اجازت کے بغیر نہیں ہوتا۔ 

اسرائیلی حملہ ایک بڑے علاقائی تنازع کو جنم دے سکتا ہے جس میں لبنان (حزب اللہ)، شام اوریہاں تک کہ عراق بھی شامل ہوسکتے ہیں جوعلاقائی عدم استحکام کا سبب بن سکتا ہے۔

ایرانی ردعمل:

 ایران کے پاس اسرائیل کے شہروں پر میزائلوں اور ڈرون سے حملہ کرنے کی صلاحیت ہے، اسرائیل پرایران کے حملہ کی صورت میں امریکہ کو بہرحال جنگ میں شامل ہونا پڑے گا۔

کچھ امریکی اتحادی، خاص طور پر یورپی ممالک جو پہلے ہی تناؤ کا شکار ہیں اس جنگ میں شمولیت سے انکار کر سکتے ہیں۔

ماہرین کا اب بھی یہ مشورہ ہے کہ امریکہ جنگ کے بجائے ڈپلومیسی کا استعمال کرے، جوہری معاہدوں اورعلاقائی سلامتی پر مذاکرات کرے۔ وقت تو یہ ثابت کرچکا کہ اقتصادی پابندیاں اورحد تو یہ ہے کہ سائبر وارفیئر ایران کی معیشت اور فوجی صلاحیتوں کو نشانہ بنانے میں ناکام رہی ہیں۔

براہ راست یا پراکسی جنگ انتہائی مہنگی اورخطرناک ہوسکتی ہے اس لیۓ امریکہ کے لیۓ لازم ہے کہ امریکہ ایران پر کسی بھی طریقہ سے حملہ کرنے کی غلطی نہ کرے بلکہ خلیجی ریاستوں کے ساتھ بگڑتے ہوۓ تعلقات کوسنوارے اورایران کے ساتھ تعلقات کو بہتر بناۓ۔ 

United States getting ready to attack Iran

According to Defense Secretary Pete Hegseth, United States has reinforced military capability in the Middle East with more warplanes, amid a more than two week old US bombing campaign in Yemen and mounting tensions with Iran.

The Pentagon's brief statement did not specify which aircraft were being deployed or where precisely they were sent.

However, as many as six B-2 bombers have relocated in the past week or so to a US-British military base on the Indian Ocean island of Diego Garcia.

Experts say that the B-2s, which have stealth technology and are equipped to carry the heaviest US bombs and nuclear weapons, in an ideal position to operate in the Middle East.

"Should Iran or its proxies threaten American personnel and interests in the region, the United States will take decisive action to defend our people," Pentagon spokesperson Sean Parnell said in a statement.

The US military's Strategic Command has declined to say how many B-2s have reached Diego Garcia and noted that it does not comment on exercises or operations involving the B-2.

There is already considerable firepower in the Middle East and the US military will soon have two aircraft carriers in the region.

US President Donald Trump threatened Iran on Sundaywith bombing and secondary tariffs if Tehran did not come to an agreement with Washington over its nuclear program.

While B-2 bombers have been employed to strike buried Houthi targets in Yemen, most experts say use of the stealthy bomber is overkill there and the targets aren't buried so deeply.

However, the B-2 is equipped to carry America's most potent bomb, the 30,000 pound GBU-57 Massive Ordnance Penetrator. That is the weapon that experts say could be used to strike Iran's nuclear program.

There are only 20 B-2 bombers in the Air Force's inventory so they are usually used sparingly.

One official told Reuters that the US military was also moving some air defense capabilities from Asia to the Middle East.

 

 

 

US imposes sanctions on entities and individuals from China and UAE

The United States on Tuesday imposed sanctions on entities and individuals in Iran, the United Arab Emirates (UAE) and China whom it accused of being part of an Iranian weapons procurement network, as President Donald Trump seeks to ramp up pressure on Tehran.

The US Treasury Department announced sanctions on six entities and two individuals in action taken in coordination with the Department of Justice, accusing them of responsibility for procurement of unmanned aerial vehicle (UAV) components on behalf of a leading manufacturer for Iran's drone program.

"Iran’s proliferation of UAVs and missiles - both to its terrorist proxies in the region and to Russia for its use against Ukraine - continues to threaten civilians, US personnel, and our allies and partners," Treasury Secretary Scott Bessent said in a statement.

"Treasury will continue to disrupt Iran’s military-industrial complex and its proliferation of UAVs, missiles and conventional weapons that often end up in the hands of destabilizing actors, including terrorist proxies."

Tuesday's action targeted one Iranian-based entity and two people based in Iran, one entity based in China and four UAE-based entities, according to the Treasury statement.

The Treasury said it was the second round of sanctions targeting "Iranian weapons proliferators" since Trump restored his "maximum pressure" campaign on Iran, which includes efforts to drive its oil exports down to zero in order to help prevent Tehran from developing a nuclear weapon.

Trump's February memo, among other things, ordered Bessent to impose "maximum pressure" on Iran, including sanctions and enforcement mechanisms on those violating existing sanctions.

Trump threatened Iran on Sunday with bombing and secondary tariffs if Tehran did not come to an agreement with Washington over its nuclear program.

 

Iranian warning to Donald Trump

A high-ranking commander of the Islamic Revolution Guards Corps (IRGC) warned on Monday that the US forces in the region are sitting in a “glass house” and should avoid “throwing stones at others.”

Brigadier General Amir Ali Hajizadeh, commander of the IRGC’s Aerospace Division, made the remarks on the sidelines of ceremonies to celebrate Eid al-Fitr.

“The Americans have 10 military bases in the region, particularly around Iran and 50,000 troops” are deployed in these based, Hajizadeh said, according to Press TV.

“This means they are sitting in a glass house; and when one sits in a glass house, he does not throw stones at others.”

The top IRGC’s comment come after threats by US President Donald Trump to bomb Iran if it refuses to reach "a new deal" on its nuclear program.

On Sunday, Trump said Iran will be bombed if it does not make a deal with the United States.

“If they don’t make a deal, there will be bombing,” he said in an interview with NBC News. He also threatened to punish Iran with what he called “secondary tariffs.”

In a post on his X account on Monday, Iranian Foreign Ministry spokesman Esmaeil Baghaei said Trump’s open threat of “bombing” the country is an affront to global peace and security.

“An open threat of ‘bombing’ by a Head of State against Iran is a shocking – affront ‑ to the very essence of International Peace and Security,” Baghaei wrote.