The Euro (EUR) is trading moderately lower against the US Dollar (USD) on Friday, changing hands at 1.1565 at the time of writing, down from the weekly highs, at 1.1590 hit on Thursday.
The pair, however, remains on track for a nearly 0.4% weekly appreciation, following a rate hike by the European Central Bank (ECB) on Thursday and a brighter market mood amid news of a potential peace deal in Iran
Markets have welcomed comments by US President Donald Trump announcing the cancellation of a third day of strikes on Iran, as he claimed a great breakthrough in the negotiations. Iran’s reaction, however, has been cautious. Tehran’s Foreign Minister spokesperson, Ismain Baghaei, affirmed on local media that a document is being analysed, but he also said that it is “closer to being approved than ever before”.
On Thursday, the ECB hiked its benchmark interest rate by 0.25% for the first time in nearly three years, leaving the Rate on Deposit Facility at 2.25%. The bank refused to commit to any particular rate path, as usual, but the upward revision of the inflation forecasts has been taken as a signal that further tightening is on the table. The Euro appreciated after the event Data released on Friday revealed that the German final Harmonised Index of Consumer Prices (HICP) confirmed preliminary figures of a 2.7% year-on-year (YoY) growth and a 0.1% contraction in May.