Investors remain cautious amid escalating US-Iran conflict, limiting USD gains and keeping oil prices under $100.
The Euro traded flat at 1.1645 against the US Dollar for a second day, lacking clear direction as geopolitical tensions curb risk appetite. Markets reacted to reports of US strikes on Iranian military targets, though hopes for negotiations persist amid discussions to reopen the Strait of Hormuz.
Earlier, the Euro found support after ECB Chief Economist Philippe Lane signaled comfort with market expectations for higher interest rates, citing indirect inflation effects beyond energy. The bank is eyeing a potential rate hike in June or July. Meanwhile, oil prices remained below the $100 mark despite the conflict.
Focus this week shifts to Thursday’s US PCE Price Index, with Tuesday’s Consumer Confidence and Dallas Fed Manufacturing Survey also in view. The data may influence Fed policy expectations amid ongoing geopolitical uncertainty.