Euro Struggles to Hold Above 1.1400 as Fresh US Strikes on Iran Boost Dollar Ahead of FOMC Minutes

EUR/USD remains on the defensive, struggling to attract meaningful buying interest as escalating tensions involving Iran continue to fuel demand for the safe-haven US Dollar. Meanwhile, the latest surge in crude oil prices has reignited inflation concerns, prompting markets to price in a greater likelihood of further Fed tightening and providing additional support to the Greenback. Investors now await the release of the June FOMC Minutes for fresh clues on the Federal Reserve’s policy outlook and the pair’s next directional move.

The EUR/USD pair manages to hold above the 1.1400 level during Wednesday’s Asian session, though upside momentum remains limited as renewed tensions between the United States and Iran dampen risk appetite. Market participants also prefer to stay on the sidelines ahead of the release of the FOMC Minutes, seeking additional clarity on the Federal Reserve’s future policy direction before taking fresh positions.

Geopolitical concerns intensified after the US launched a fresh round of strikes against Iran on Tuesday in response to reported attacks on three oil tankers transiting the Strait of Hormuz, raising fears that the fragile ceasefire could unravel. The escalation prompted investors to seek safety in the US Dollar, with the resulting risk premium providing support for the Greenback and weighing on the EUR/USD pair.

Adding to the USD’s strength, Washington reportedly revoked a major exemption that had enabled Iran to continue selling oil on global markets. The move fueled a sharp rise in crude oil prices and reignited concerns over energy-driven inflation. As a result, traders increased expectations that the Fed could deliver at least one additional rate hike before year-end, pushing US Treasury yields higher and offering further support to the US currency.

Despite the favorable backdrop, USD bulls remain cautious ahead of the publication of the Minutes from the Fed’s June 16–17 policy meeting later in the day. Investors will closely examine the document for fresh signals regarding the central bank’s monetary policy outlook, which could shape near-term USD sentiment and determine the next directional move for EUR/USD.