Euro softens to near 1.1600 on US–Iran tensions
The EUR/USD pair trades in negative territory around 1.1615 during the early Asian session on Monday. The Euro (EUR) extends the decline as the prolonged US-Iran conflict weighs on the riskier assets. Traders await the preliminary readings of the Purchasing Managers' Index (PMI) data from the Eurozone and the US, which are due on Thursday.
Iranian media reported on Sunday that the US had failed to make any concrete concessions in its response to Tehran's latest proposals to end the conflict. Fars news agency stated that Washington had set five main conditions for a peace deal, including the removal of uranium used by Iran’s nuclear program to the US, no US reparations to Tehran and the unfreezing of less than a quarter of Iran’s suspended assets.
US President Donald Trump on Sunday threatened Iran to “get moving,” or seemingly face new consequences. Ongoing tensions between the US and Iran might continue to boost a safe-haven currency such as the US Dollar (USD) and act as a headwind for the major pair.
On the other hand, the European Central Bank (ECB) policymakers hinted at an interest rate hike to tame sticky inflation expectations. This, in turn, could help limit the shared currency’s losses. The majority of economists from the Reuters poll, around 85%, indicated that the ECB would raise its deposit rate by 25 basis points (bps) to 2.25% in June, up from just over half expecting that before the April meeting.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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