Geopolitical tensions and rising oil prices drive risk-off sentiment, pushing the euro below 1.16 against the dollar ahead of key US inflation data.
EUR/USD dropped below 1.16 as risk sentiment soured following fresh US strikes on Iran. Brent crude climbed from USD 94.25 to near USD 98 per barrel, adding pressure on risk assets and the euro.
The move follows a sharp decline in broader market risk appetite, with investors also eyeing today’s release of US Personal Consumption Expenditures (PCE) inflation data. March’s PCE rose 3.2% year-over-year, exceeding the Fed’s 2% target, and markets expect continued price pressures in April.
In the eurozone, the ECB will publish April meeting minutes, likely reflecting growing hawkishness among policymakers. May business sentiment data will also be released, with focus on firms’ selling price expectations after last month’s record surge.