Euro Nears Two-Month Low, Middle East Conflict Pressures
The euro held steady on Monday (June 8) above US$1.15, but remained near its weakest level since April 3. Pressure on the single European currency emerged after tensions in the Middle East escalated, fueling concerns that the conflict in Iran could drag on for longer and destabilize global markets.
Market sentiment was further undermined after Brent oil prices surged more than 4% following a missile exchange between Iran and Israel. Although President Donald Trump called for an end to the conflict and encouraged peace talks, investors remain concerned that the escalation could increase inflation risks through rising energy prices.
On the monetary policy front, investors are now bracing for a possible interest rate hike by the European Central Bank (ECB) this week. Market participants expect the ECB to raise interest rates three times, with the first hike potentially occurring as soon as June 11, after eurozone inflation rose to 3.2% in May, its highest level in more than two and a half years.
However, the euro's outlook remains clouded by the region's economic weakness. The latest data shows that Eurozone GDP was revised to contract in the first quarter of 2026, marking the first decline since late 2022 and the deepest since mid-2020. Going forward, investors will be closely monitoring the direction of oil prices, developments in the Middle East conflict, and the ECB's decision as key determinants of the euro's future movements. (asd)
Source: Newsmaker.id
