Geopolitical risks and anticipation of US CPI data weigh on the Euro, pushing the pair to 1.1775 in early trading.
The EUR/USD pair fell to 1.1775 in early Asian trading Tuesday, pressured by escalating US-Iran tensions and caution ahead of April’s US inflation report. Traders are assessing risks to the fragile ceasefire after Iran’s warning of potential retaliation and US President Trump’s dismissal of Tehran’s peace offer as unacceptable. Prolonged conflict could strengthen the USD as a safe-haven asset, further weighing on the pair.
Markets are also pricing in a 92% chance of a 25 basis point ECB rate hike in June, with three hikes expected by 2026. ECB Governing Council member Martin Kocher suggested rate hikes may proceed if energy prices remain elevated, offering potential support to the Euro. However, near-term focus remains on US CPI data, which could influence Fed policy expectations.