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EUR/USD holds above 1.1500 as Strait of Hormuz reopening hopes grow
The euro steadied above 1.1500 after US and regional officials pointed to talks on reopening the Strait of Hormuz, while softer US JOLTS data kept attention on upcoming ADP and nonfarm payrolls.
EUR/USD held firm above 1.1500 as traders weighed developments around US-Iran talks and expectations that the Strait of Hormuz could reopen, potentially easing shipping risks. FXStreet reports that US Treasury Secretary Scott Bessent said Washington is in talks with Iran and suggested an agreement could come as early as Tuesday or Wednesday, while Al Arabiya, citing a high-ranking source, said an announcement on reopening the route is expected shortly.
The reopening headlines coincided with a sharp drop in oil prices, with West Texas Intermediate moving toward $75.50, its lowest level in three weeks, which helped shape sentiment across inflation expectations. FXStreet also noted that the US dollar initially weakened before recovering some ground, with the US Dollar Index around 99.90 and little changed on the day.
In the diplomatic backdrop, FXStreet said US Secretary of State Marco Rubio stated progress has been made in discussions with Iran and Oman on allowing more ships to pass through the Strait of Hormuz, though no final agreement has been reached. If the strait fully reopens, the report added, oil could fall further, which would lower inflation risks and reduce the odds of September interest rate hikes from the Federal Reserve and the European Central Bank.
Separately, attention shifted to US labor-market data after JOLTS job openings fell to 7.359 million in June from 7.594 million, below the 7.4 million forecast. FXStreet said traders now look to ADP Employment Change on Wednesday and nonfarm payrolls on Friday, while ING’s model showed EUR/USD modestly overvalued by around 0.5% to 1.0% at current levels, requiring favorable shifts in short-term rate differentials to push higher.
Latest closeEUR/USD 1.151 ▼0.1%|Dollar index 99.99 ▲0.2%