Geopolitical risks in the Gulf push Brent crude above $94, weighing on the Euro amid broader risk aversion.
The Euro traded below 1.1600 against the US Dollar for a third straight session, pressured by rising geopolitical tensions in the Middle East. Fresh US strikes on Iran and Tehran’s reported retaliation lifted Brent crude prices to $94 from Wednesday’s lows near $92, dampening risk appetite.
Despite the decline, the EUR/USD pair remains within its recent range, supported by expectations of a European Central Bank rate hike. Markets price a 91% chance of a 25 basis point increase to 2.25% at the ECB’s June 11 meeting, with policymakers signaling further tightening.
ECB Chief Economist Philip Lane warned that inflation risks from the energy shock could persist beyond the current conflict, reinforcing the need for higher rates. US data, including upcoming personal consumption figures, may further influence the pair’s direction.