The Euro gains modestly, climbing above 1.1400 amid growing market bets on additional ECB rate hikes.

• EUR/USD posts modest gains, hovering around the 1.1430 level during Friday’s early Asian trading session.
• ECB meeting accounts revealed that policymakers expect inflationary pressures to remain elevated despite markets pricing in nearly three additional rate hikes.
• A US official reaffirmed that Washington remains committed to pursuing a diplomatic resolution with Iran.

The EUR/USD pair edges higher to around 1.1430 during Friday’s early Asian session, supported by a weaker US Dollar (USD). The Euro finds support as investors increase expectations for further European Central Bank (ECB) tightening amid persistent inflation concerns and uncertainty surrounding the Middle East conflict.

Minutes from the ECB’s latest meeting released on Thursday showed that policymakers were presented with forecasts indicating inflation could remain above the central bank’s target through next year, even with nearly three additional rate increases. After raising interest rates in June, the ECB is widely expected to deliver two more hikes over the coming year as it seeks to contain inflationary pressures, including those stemming from higher energy costs linked to the Iran conflict.

Market participants have recently strengthened their bets on additional ECB rate hikes amid growing doubts over the prospects for a lasting agreement between the United States and Iran to end the war. These expectations continue to lend support to the common currency.

Investors will remain focused on developments in the US-Iran conflict, as any escalation in tensions could increase demand for safe-haven assets and weigh on EUR/USD. Nevertheless, a US official stated on Thursday that Washington remains committed to the memorandum of understanding with Iran, despite President Donald Trump’s remarks earlier this week that the framework agreement aimed at ending the conflict was “over.”