EUR/USD Reverses 1% Gain as Iran Rejects US Uranium Demand

The euro erased its prior-day gains of nearly 1 percent against the dollar on Wednesday after reports emerged that Iran’s Supreme Leader has rejected a key US demand to export its stockpile of highly-enriched uranium, dimming hopes for a near-term peace deal. The reversal highlights market sensitivity to the ongoing negotiations, where a failure could trigger significant safe-haven flows into the US dollar.

"The Supreme Leader’s directive, and the consensus within the establishment, is that the stockpile of enriched uranium should not leave the country,” a senior Iranian source told Reuters, hardening Tehran’s position in the final stages of negotiations. The statement contradicts a wave of earlier optimism that a deal was imminent.

The news sent the EUR/USD pair tumbling after it had touched a multi-week high just a day earlier. The Dollar Index (DXY), which measures the greenback against a basket of major currencies, strengthened on the news, reflecting a flight to safety. Oil prices remained volatile, with traders on high alert to the security of the Strait of Hormuz, through which roughly 21 percent of global oil consumption passes.

At stake is a fragile ceasefire that has paused a conflict that began with US-Israeli strikes on Iran on February 28. A collapse of the talks could see a return to hostilities, a continued US blockade of Iranian ports, and potential disruptions to global energy supplies, a scenario that would likely further bolster the dollar and weigh heavily on risk-sensitive currencies like the euro.

Tehran Hardens Stance on Uranium

The primary sticking point remains the fate of Iran's enriched uranium. According to a Reuters report, US President Donald Trump had assured Israel that the removal of Iran’s stockpile of highly enriched uranium would be a non-negotiable component of any peace agreement. Israel has maintained that the conflict cannot be considered over until the material, considered critical for nuclear weapons development, is removed from Iranian territory.

The International Atomic Energy Agency (IAEA) estimated that before the conflict began, Iran possessed 440.9 kg of uranium enriched to 60 percent purity, a level far beyond what is needed for civilian use. While the current status of the stockpile is unclear following strikes on nuclear facilities, Tehran's refusal to export the material represents a significant obstacle. One Iranian source suggested a potential compromise, noting there are "feasible formulas" such as diluting the stockpile to a lower enrichment level under IAEA supervision.

Diplomatic Deadlock Continues

Despite the pause in direct military action, diplomatic progress has been limited, with conflicting headlines keeping market participants guessing. While some reports suggested peace efforts were gathering pace, the rejection of the uranium demand shows major gaps remain between the two sides.

Iranian officials have stated their priority is securing a permanent end to the war with credible guarantees against future attacks before entering detailed negotiations on its nuclear program. Tehran has consistently denied seeking nuclear weapons. The last time geopolitical tensions in the region flared to this degree, oil prices jumped more than 10 percent in a week, highlighting the economic stakes of a diplomatic failure.

This article is for informational purposes only and does not constitute investment advice.