US & Iran Tensions Have Not Gone Away As Iran Launch Satellite

Updated: Feb 11, 2020

Iran attempted to launch a satellite on Sunday, according to the country's Minister of Information and Communications Technology Mohammad Javad Azari-Jahromi. However, this was reported to have failed, as reported by state television. It did not make it into orbit as it lacked speed.

Iran's satellite programme has in the past suffered failures and setbacks, however, in the statement released by the official IRIB news agency, the Zafar satellite will be put into orbit on Sunday from Semnan in North Central Iran, travelling at a speed of 7,400 kilometres.

The launch of the satellite was originally scheduled for Saturday but was delayed without explanation, although on Saturday a cyberattack disrupted Iran's internet services. Following Saturday's delay, Iran's Defense Ministry insists the Zafar satellite will be launched at the first opportunity.

However, U.S. President Donald Trump believes that Iran's space and satellite programme is just a cover for their long-range ballistic missile ambitions. The concern in the U.S. is that the technology used in putting satellites into orbit could also be used for long-range ballistic missiles.

The U.S. also in the past accused the North Koreans of using their satellite programme to hide the development and improvement of their ballistic missile technology, which in theory has now given the North Koreans the capability to hit parts of the U.S. mainland.

Regimes like the ones in Iran and North Korea are fearful of regime-change instigated by the U.S., and consequently, develop their missile technology as an insurance policy in the hope that the U.S. would think twice before attacking them.

It is unclear how President Trump will react to a successful launch by the Iranians. He does not have many options, especially on the economic front because the so-called 'maximum pressure' sanctions imposed on Iran by the U.S. are as described already at the maximum.

A military strike on Iranian facilities will have serious repercussions in the region and possibly around the world.

What does this mean for the markets?

Should Iran continue attempts to push for a successful launch of the satellite, then tensions will further rise between U.S. and Iran. If that proves to be the case and in the event, Iran does successfully manage to complete its mission, then big safe-haven flows could soon start to be seen, Gold, JPY and CHF gains. It is certainly something to keep an eye on for developments.


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