EUR/USD edged lower to around 1.1645 during Tuesday’s early Asian trading session as the US Dollar gained support from ongoing geopolitical uncertainty. President Trump said he had postponed a planned strike on Iran following requests from Gulf nations. Meanwhile, European Central Bank officials signaled that another interest rate hike could be needed to contain persistent inflation expectations.
EUR/USD remains under pressure near 1.1645 during Tuesday’s early Asian session as the Euro weakens against the US Dollar amid ongoing geopolitical uncertainty tied to Iran. Investors are also awaiting remarks later in the day from ECB Chief Economist Philip Lane.
US President Donald Trump stated that he had delayed a planned military strike on Iran following appeals from leaders of Qatar, Saudi Arabia, and the United Arab Emirates, noting that “serious negotiations are now taking place,” according to the BBC.
Still, market caution persists after Trump warned that the US could launch a “full, large-scale attack on Iran” at any time if negotiations fail to produce an acceptable agreement. Concerns over an extended Middle East conflict continue to support safe-haven demand for the US Dollar, weighing on the EUR/USD pair in the short term.
Meanwhile, hawkish rhetoric from European Central Bank officials may help limit losses for the Euro. ECB Governing Council member Yannis Stournaras said over the weekend that a moderate rate hike could help contain inflation without significantly harming economic growth.
A Reuters survey also showed that roughly 85% of economists expect the ECB to raise its deposit rate by 25 basis points to 2.25% in June, compared with just over half holding that view before the April policy meeting.
THE ETERNAL SOVEREIGN 
Leave a comment