$-Yen slips on Iran missile-test report

Iran has test-fired its long-range Shahab-3 missile, whose range is sufficient to put Israel within reach, Arabic language state channel Al-Alam reported. The channel said that the missile test fired was a ''Shahab-3, with a conventional warhead weighing one ton and a 2,000 kilometer (1,240 mile) range.'' The test firing, which also included the firing of several other missiles, comes at a time of growing tensions over the Iranian nuclear program, which the West fears, could be aimed at making an atomic bomb.

According to Wall Street Journal reports, Iranian President Ahmadinejad said he doesn"t see the possibility of a war with the U.S. or Israel, at a summit of developing Muslim nations in Malaysia.

Then dollar decline has pushed up commodities. According to a Dow Jones report, Dollar-Yen has slipped on the Iran missile report, which some dealers believe is an over-reaction.

Additional inputs from Manisha Gupta, CNBC-TV18 

The reason why the market is rallying today is that crude has cooled down or had cooled down, but is beginning to inch up again on the news that Iran has test fired some missiles one again. That is not a good news and that is leading to a little bit of a pull back in crude.

The latest reports say that this happened early on the morning of July 7 - Iran has fired nine long and medium range ground to ground missile. The important part to read into this is that these missiles can travel as far as Israel and US basis in the region - this is as per the state media reports that we are reading here and this will add to the geopolitical concerns.

We have been talking about the risk premium going off because Iran has been talking positive. But this latest action from Iran has again perked up commodities in the markets, slightly though at this point in time because most of the regions would be reacting to this later, as in when Europe and US markets open. But we have seen US dollar decline a bit, Euro is back again at 1.57. There has been a bit of perk up in Yen as well and this during the day might lead to some bargain buying back into commodities.

This will be the prime motivating factor for where crude will move next in the near-term because this becomes an important trigger at this point in time. The inventories are important because market has concerns about supplies as well and the latest thing that has come in from Iran is -European and US officials are meeting Iran’s nuclear negotiator in the later part of this month and this latest development would make the situation a bit sour now.