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Euro holds above 1.1400 as hawkish ECB tone supports EUR/USD

EUR/USD trades near 1.1410 as traders expect the ECB to keep its deposit rate at 2.25% in July, while Middle East tensions could limit gains via safe-haven demand for the US dollar.

Reported · Written up by our desk · Major Pairs

EUR/USD stayed above 1.1400 in early European trade on Wednesday, holding near 1.1410 as a hawkish tone from the European Central Bank supported the shared currency, FXStreet reported. The article pointed to trader expectations for a more hawkish ECB path amid concerns about persistent inflation.

The ECB raised its key interest rates to 2.25% at its June policy meeting, and markets were looking for the deposit rate to remain at 2.25% at the ECB’s July meeting on Thursday. Money markets, however, implied higher rates later, with the ECB deposit rate seen at 2.66% in December and 2.73% in February 2027, and Reuters pricing suggested a full interest-rate increase in September.

Despite the ECB-driven support, the upside for EUR/USD may be capped as escalating military tensions in the Middle East bolster demand for safe-haven assets like the US dollar. FXStreet cited reports that the US launched strikes on Iran for an 11th consecutive day on Tuesday, with Iran warning of expanded strikes and targeting US and allied interests if attacks continue on its nuclear sites.

Latest closeEUR/USD 1.141 ▼0.0%

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