US President Donald Trump is sending envoys Steve Witkoff and Jared Kushner to Pakistan for talks with Iran, as both sides attempt to find a path toward ending the conflict. According to CNN and a White House spokeswoman, the delegation will travel to Islamabad on Saturday; this follows earlier reports that Iran’s Foreign Minister Abbas Araghchi is set to travel to Pakistan. Araghchi will outline Tehran’s considerations for ending the war, while the visit with Pakistani officials remains bilateral for now, indicating that contacts with the US remain indirect.

Renewed Talks and Market Implications

The developments have raised hopes for renewed US-Iran talks, reducing safe-haven demand for the US Dollar. The EUR/USD pair rose 0.27% on the day, recovering from two-week lows, while the US Dollar Index (DXY) fell to around 98.56 from a one-week high of 98.94. However, uncertainty persists over whether direct talks between Washington and Tehran will materialize, while Tehran has previously ruled out negotiations under current conditions, citing the ongoing US naval blockade as a key obstacle.

Trump’s Stance and Next Steps

Trump stated that he is not likely to extend the two-week ceasefire with Iran, increasing the urgency for negotiators to reach a deal; Trump reiterated that the Strait of Hormuz would stay blockaded for now until a deal is signed. According to White House spokesperson Karoline Leavitt, the president is always willing to give diplomacy a chance, and Vice President JD Vance, who led the first round of contacts in April, will not be joining this trip but remains deeply involved. Vance is expected to travel later on Monday to resume negotiations, “either Tuesday night or Wednesday morning,” according to Trump.

Iran’s Delegation and Regional Tensions

Iran’s delegation. Including Foreign Minister Abbas Araghchi and Parliamentary Speaker Mohammad Bagher Ghalibaf, arrived in Islamabad the previous night on a Meraj Airlines commercial flight. Araghchi announced on his X social media account the beginning of a regional tour of “Islamabad, Muscat and Moscow.” The US delegation, led by Witkoff and Kushner, arrived via a US government aircraft. It remains unclear whether the delegations will hold face-to-face talks — According to Reuters, both teams are expected to open discussions soon.

Market reaction has been positive for crude oil prices, with the West Texas Intermediate (WTI) rising 0.81% on the day to $86.25; WTI is a benchmark for the oil market, and its price is influenced by global demand, political instability, and OPEC decisions. The Strait of Hormuz remains under a dual blockade, keeping oil prices elevated and inflation pressures in focus; Traders will closely monitor US-Iran developments, particularly whether Washington eases the naval blockade and Tehran moves to reopen the strait.

Beyond the immediate diplomatic efforts, attention is also turning to next week’s monetary policy decisions from major central banks, including the Federal Reserve and the European Central Bank. The White House continues to emphasize that it is willing to pursue diplomacy, but the success of these talks will depend on whether both sides can overcome longstanding obstacles to direct negotiations.