Oil Slump and Dollar Retreat in Tehran; Arm Holdings and Ethereum Buck the Trend

Weekly Narrative: The Rial's Unexpected Strengthening Against the Global Market

The week ending June 20 saw global markets weighed down by a heavy oil sell-off and a meaningful divergence between crypto and tech stocks; but the week's real surprise was the Tehran market. Contrary to the usual expectation of the dollar and gold as safe-haven assets, the US dollar in the free market retreated from 170,000 tomans to 161,300 tomans (a 5.12% decline), and Tether also fell 6.99%. This simultaneous strengthening of the rial against the dollar had a direct effect on the toman-denominated returns of every dollar-priced asset, as examined below.

Global Market: Energy Slump, Crypto Divergence, and Chipmaker Gains

Among the main global market groups, energy carriers recorded the week's steepest decline. Brent crude plunged from $87.33 to $80.59 (a 7.72% drop), and WTI crude fell from $84.88 to $76.54 (a 9.83% drop). By contrast, natural gas, up 2.50% to $3.198, was the only energy-linked asset with a positive return.

In the crypto market, the two leading assets moved in completely opposite directions: Bitcoin fell from $64,500 to $63,567 (a 1.45% decline), while Ethereum rose from $1,673.04 to $1,724.26 (a 3.06% gain). This divergence, unusual given the typically high correlation between BTC and ETH, suggests that this week capital within the crypto market was redistributed between the two assets rather than exiting as a bloc.

US technology stocks presented a mixed picture. Apple rose 2.36% and Amazon rose 2.45%, Microsoft fell 2.90%, and Oracle was essentially flat (+0.09%). The week's standout was Arm Holdings' 15.40% surge and Broadcom's 7.66% gain; European chipmakers moved in the same direction, with ASML up 3.55%, Infineon up 3.17%, and STMicroelectronics up 1.41%. This pattern shows that the chip supply chain was this week a destination for capital, not a casualty.

By contrast, Chinese technology stocks, with an average decline of 4.86% and all ten tracked names negative, were the market's weakest group: XPeng -8.83%, Li Auto -7.62%, Alibaba -5.07%, Tencent Music -5.31%, and Tencent -5.01% led the losses. Indian technology stocks showed a mixed picture—Yatra +12.81% and MakeMyTrip +8.27% versus Infosys -9.97% and Sify -5.30%, with the group averaging roughly +1.9%.

Commodity Market: The Gap Between Agriculture and Metals

In the commodities market, the agricultural group posted relatively positive performance: cocoa surged 9.63% to $4,362, corn rose 7.63%, wheat rose 4.92%, cotton rose 3.92%, and rice rose 4.69%, leading the gains, while sugar was the group's only decliner, down 0.70%. In industrial and precious metals, the picture was reversed: global gold fell 1.31%, copper fell 1.68%, aluminum fell 2.78%, and the steel index (steel ETF) fell 4.96%.

Tehran Market: Dollar and Gold Retreat in Tandem

Contrary to the common image of "dollar and gold as a shield," the Tehran market this week saw the dollar, Tether, and domestic gold all retreat together. The US dollar opened at 170,000 tomans and closed at 161,300 tomans (a 5.12% decline). Tether (USDT), down 6.99% from 171,650 to 159,650 tomans, recorded a steeper decline than the physical dollar.

In the domestic gold market, the Emami coin fell 4.08% to 164.5 million tomans, and 18-karat gold fell 7.48% to 16,098,620 tomans. This came even as the global gold ounce fell only 1.31%; a large part of the decline in domestic gold is the direct result of the rial's strengthening against the dollar, not simply a tracking of the global gold market.

Crypto Market and Its Link to Tehran

The Bitcoin-Ethereum divergence described in the global section looks different once translated into tomans. Toman-denominated Bitcoin fell 6.49%—far more than the 1.45% decline of its dollar counterpart—because the rial's 5.12% strengthening eroded the toman-denominated return on this asset. Ethereum, despite gaining 3.06% in dollars, recorded a 2.21% decline in tomans. In other words, the rial's strengthening turned Ethereum's dollar gain into a toman loss.

Global Markets Through a Toman Lens: A Different Picture

This pattern repeats across dollar-denominated assets: any asset with limited gains or losses in dollars shows a far steeper decline once converted to tomans, owing to the rial's 5.12% strengthening:

• Global gold: -1.31% in dollars, but -6.36% in tomans
• Natural gas: +2.50% in dollars, but -2.75% in tomans
• Copper: -1.68% in dollars, but -6.71% in tomans
• Ethereum: +3.06% in dollars, but -2.21% in tomans

These calculations show that for the Iranian investor, a gain in a global asset does not necessarily mean a toman-denominated profit; in a week when the rial strengthens, even dollar-profitable assets can turn into losses within a toman-denominated portfolio.

Transition to the Iranian Economy: Doubled Pressure on Foreign Exchange Revenue

The combination of Brent's steep decline (-7.72%) and the rial's simultaneous strengthening (+5.12% against the dollar) has placed double pressure on foreign exchange revenue from oil exports; the drop in global oil prices, combined with the strengthening of the national currency, converts each unit of oil exports into far fewer tomans than in previous weeks. In contrast, the simultaneous decline in industrial metals (copper, aluminum, steel) could reduce the cost of raw material inputs for downstream industries in the short term.

Arm Holdings' 15.40% gain and Broadcom's 7.66% gain, together with gains among European chipmakers, show that global investors still trust the semiconductor supply chain—a trend that, if it continues, could also be a positive signal for Iranian industries dependent on chip imports. By contrast, the average 4.86% decline in Chinese technology stocks points to sustained pressure on that sector.

Risk Signals and the Outlook Ahead

At the level of risk signals, several key points can be drawn from this week's data:

• Simultaneous rial strengthening: the 5.12% decline in the dollar and 6.99% decline in Tether in the Tehran market, contrary to the usual pattern, suggest demand pressure for foreign currency eased this week
• Bitcoin-Ethereum divergence: Ethereum's gain alongside Bitcoin's decline is an unusual pattern that, if it continues, could signal a rotation of capital within the crypto market
• Oil below $81: Brent's decline to $80.59 intensifies pressure on Iran's foreign exchange revenues, though the rial's simultaneous strengthening offsets part of this pressure on the domestic budget

Given the rial's strengthening this week, the Tehran currency market will likely fluctuate in the near term within a range close to 160,000 to 165,000 tomans, unless a fresh shock emerges from policymakers or the global oil market. Given the crypto divergence, caution with leveraged positions and separately tracking Bitcoin and Ethereum is advisable.