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Euro struggles to build on gains as Middle East tensions lift the dollar

EUR/USD was around 1.1415, after failing to push above 1.1420, while safe-haven demand supported the US Dollar amid renewed US-Iran tensions.

Reported · Written up by our desk · Major Pairs

EUR/USD traded near 1.1415 on Wednesday, up about 0.15% on the day, but the euro’s rebound looked capped after the pair failed to break above 1.1420, FXStreet said. The common currency held a cautious tone as rising Middle East tensions continued to shift investor positioning toward safe-haven assets.

FXStreet linked the dollar’s relative strength to an escalation in Washington and Tehran. The United States launched fresh strikes on Iranian targets, and Trump warned that any Iranian attack on a vessel in the Strait of Hormuz would trigger US strikes on key Iranian infrastructure, including bridges and power plants.

The outlet also pointed to oil, which has rallied more than 25% since tensions escalated, as a headwind for the Eurozone economy given its sensitivity to higher energy costs. At the same time, EUR support came from expectations that the European Central Bank will meet Thursday, with markets widely expecting rates to be left unchanged.

For the dollar, FXStreet said the US Dollar Index held above 101.00 after recovering part of earlier losses. It also noted that recent US inflation data has reduced expectations for further Fed tightening, even as geopolitical risk continues to support the Greenback.

Latest closeEUR/USD 1.141 ▼0.0%|Dollar index 101.12 ▼0.1%

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