Oh dear. This move comes after oil was starting to retreat a tad and Iranian president Ahmadinejad (a figurehead, but one who gets treated seriously by the Western media) was sounding sensible and willing to negotiate.
Iran has test fired nine long- and medium-range missiles, including one which it has previously said could reach Israel and U.S. bases in the region, state media reported on Wednesday.
The tests occurred at a time of increased tension between Iran and Israel over Tehran’s disputed nuclear program, which the West fears is aimed at making bombs. Iran says its nuclear program is only for power generation.
State Press TV said the missiles tested by Iran’s Revolutionary Guards included a “new” Shahab 3 missile, which officials have said could reach targets 1,250 miles away.
On Tuesday, an aide to Iran’s Supreme Leader was quoted as saying the Islamic Republic would hit Tel Aviv, U.S. shipping in the Gulf and U.S. interests around the world if it was attacked over its nuclear activities.
Bloomberg on the initial market reaction:
The dollar declined against the yen and euro after Iran’s state television network said the nation test-fired a long-range missile capable of reaching Israel.
The yen and the Swiss franc strengthened on speculation the missile test signals international political tensions will keep escalating, spurring investors to buy assets in nations that are perceived as safer. Ali Shirazi, an aide to Iran’s Supreme Leader Ayatollah Ali Khamenei, said yesterday the Middle Eastern nation would strike Israel and the U.S. Navy in the Persian Gulf as a response to any American attack on its nuclear program.
Interestingly, oil did not move up much:
Crude oil for August delivery traded at $136.63 a barrel after tumbling 3.8 percent yesterday, extending its decline from a record high of $145.85 on July 3.
The sentence is worded badly. August crude closed in New York at $136.04 yesterday.