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Euro regains 1.1400 as USD weakens on Iran diplomacy hopes
EUR/USD rebounded above 1.1400 as the US paused strikes for 13 straight nights and oil prices slid, easing inflation concerns ahead of the Fed decision Wednesday.
EUR/USD climbed back above 1.1400 in the Asian session on Monday, supported by a broadly weaker US dollar, according to FXStreet.
FXStreet attributed the move to renewed optimism around diplomacy to end a five-month US-Iran conflict. The US paused its bombing campaign following 13 consecutive nights of strikes on Iranian targets late on Friday, while Tehran suspended retaliatory attacks against Washington's allies in the Middle East, with a UN appearance from US ambassador Mike Waltz noting President Donald Trump wants negotiations to have some room.
The easing in hostilities also contributed to a sharp fall in crude oil prices, which tempered inflation concerns and weighed on rate hike expectations for the US Federal Reserve. That combination reduced safe-haven demand for the greenback, keeping the USD Index (DXY) away from its recent monthly peak.
Despite the rebound, FXStreet said traders may avoid aggressive EUR/USD positioning ahead of the Fed policy announcement at the end of a two-day meeting on Wednesday, with US policy guidance expected to drive near-term dollar price dynamics.
Latest closeWTI crude $90.47 ▼1.9%|EUR/USD 1.137 ▼0.3%