EUR/USD Remains Weak Near 1.1550 As Israel-Iran Tensions Escalate
EUR/USD extended its decline for the second straight session, trading around 1.1540 during Asian hours on Monday (6/16). The currency pair depreciated as the US Dollar (USD) strengthened amid increased demand for safe havens as geopolitical tensions escalate in the Middle East.
Israel launched an attack on Iran’s nuclear facilities and missile plants on Friday. Iran responded with an attack on Israel on Sunday night, with explosions seen in the coastal city of Haifa. Israel continues to attack military targets in Iran, despite international calls for diplomacy and de-escalation, according to CNN.
Additionally, Iranian media outlet Mehr News reported that Iran had launched a fourth phase of operations against Israel on Sunday. Iranian officials underlined that they would “respond firmly to any reckless action” by Israel.
On Friday, the University of Michigan (UoM) showed that its Consumer Sentiment Index rose to 60.5 in June from 52.2 previously. This reading was above the market consensus of 53.5. The US Federal Reserve (Fed) is widely expected to keep its policy interest rate unchanged in the range of 4.25%–4.50% in its upcoming decision on Wednesday. However, traders are now pricing in a 25 basis point rate cut in September.
However, the EUR/USD pair’s decline was contained as the Euro (EUR) received support from improved sentiment around the European Central Bank (ECB) pausing its easing cycle to assess the impact of new US tariffs. (alg)
Source: FXstreet
