The Euro weakens as stalled US-Iran talks and rising Brent crude above $87 pressure eurozone economies and lift the US Dollar.
The Euro fell against the US Dollar on Tuesday, trading at 1.1539 after retreating from a seven-week high of 1.1580. The decline follows a stalemate in US-Iran negotiations over reopening the Strait of Hormuz, raising concerns about prolonged supply disruptions and higher oil prices.
Brent crude prices climbed above $87 per barrel, up 7% from last week’s close, adding strain on crude-importing eurozone economies. Meanwhile, hawkish comments from Cleveland Fed President Beth Hammack supported the USD, as she indicated that current monetary policy is not harming the economy and that further rate hikes may be needed to curb inflation.
Investors are closely watching Wednesday’s US Consumer Price Index data, with expectations for headline inflation to ease to 3.4% year-on-year in July from 3.5% in June. Core CPI is forecast to rise slightly to 2.5% from 2.4% in the prior month.