Senior Trump Administration official described Trump as being in a "mode of defiance"; he is still willing to see if a diplomatic solution can be reached, but isn't necessarily expecting that outcome, via WSJ

The statement from a senior Trump administration official underscores a potential escalation in U.S.-Iran tensions, which may impact risk sentiment across various asset classes. The emphasis on 'maximum pressure' suggests ongoing geopolitical risk, potentially supporting a stronger USD while negatively affecting commodities like oil due to supply-side concerns. Traders should monitor developments closely, as a breakdown in diplomacy could lead to volatility in the FX and energy markets.