Geopolitical risks surrounding US-Iran negotiations bolster the USD, pressuring the euro near 1.1650 in early trading.
EUR/USD retreated to around 1.1650 during Asian trading on Monday, reversing two days of gains as the USD strengthened. The move reflects market caution over fluid US-Iran peace negotiations, with the greenback benefiting from its safe-haven status amid rising geopolitical uncertainty.
Prior to the decline, the pair had stabilized above 1.1680, supported by a brief pullback in the USD. However, renewed concerns over potential disruptions in Middle East diplomacy, particularly regarding the Strait of Hormuz and uranium enrichment terms, have weighed on risk sentiment.
Iranian officials, including Foreign Minister Abbas Araghchi, confirmed ongoing dialogue with Washington but dismissed media speculation as premature. Tehran has set firm conditions for any agreement, further clouding the outlook for a resolution.