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Politico has reported that the Iranian government is weighing an assassination attempt against the American ambassador to South Africa, US intelligence reports say, according to a U.S. government official familiar with the issue and another official who has seen the intelligence.

News of the plot comes as Iran continues to seek ways to retaliate for President Donald Trump’s decision to kill a powerful Iranian general earlier this year, the officials said.

If carried out, it could dramatically ratchet up already serious tensions between the US and Iran and create enormous pressure on Trump to strike back — possibly in the middle of a tense election season.

Market implications

That has firmly put Iran back onto the geopolitical watchlist for forex traders.

It should come at no surprise either.

Under US President Donald Trump, the two countries have veered toward outright military conflict on more than one occasion.

The latest ratcheting up of tensions between the two nations in decades of confrontations was borne originally from the airstrike that killed Soleimani for which Iran promised to retaliate. 

What followed was the Jan. 8 missile attack on the al-Asad military base in Iraq and around the same time, an Iranian missile took down a civilian airliner, killing 176 people

To date, this was believed to be a revenge plot that backed fired leading to fury inside Iran at the regime’s incompetence and shifting explanations for the incident, along with condemnation abroad.

This news should gather some ait time this week in the markets and oil traders will be keeping a watchful eye for how it develops.