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Euro rises versus dollar around 1.1380 amid Fed and tariff worries

Money markets are pricing a roughly 35.8% chance of a Fed rate hike this month, while tariffs of 10% to 12.5% on imports are reported to be under consideration.

Reported · Written up by our desk · Major Pairs

The euro edged higher against the US dollar, with EUR/USD trading around 1.1380 during Asian hours on Friday, after posting modest losses the previous day, according to FXStreet.

FXStreet said the euro’s upside could be capped if the dollar regains strength, pointing to Middle East tensions that could raise crude prices and a resulting view that the Fed may resume raising rates. CME FedWatch data cited by FXStreet showed markets pricing about a 35.8% chance of a Fed hike this month and an 82.1% probability of at least a quarter-point hike in September.

Geopolitical developments highlighted by FXStreet included reports that Yemen’s Iran-backed Houthi group attacked two Saudi oil tankers in the Red Sea, and the US carrying out its 13th consecutive night of military strikes on Iran. US President Donald Trump also warned of major military punishment for the Houthis and Iran, and said he was close to deciding on a massive, unprecedented military operation against Iran, factors FXStreet linked to oil and inflation expectations.

FXStreet also cited trade and central bank inputs affecting currency moves. Bloomberg, as described by FXStreet, reported the US plans new tariffs of 10% to 12.5% on imports from major trading partners, and the ECB’s decision to hold key rates steady after a 25 basis-point hike in June, keeping the deposit facility at 2.25%, the main refinancing rate at 2.40%, and the marginal lending rate at 2.65%.

Latest closeWTI crude $92.23 ▲6.2%|EUR/USD 1.138 ▼0.2%

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