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Euro slips below 1.1550 as US-Iran peace hopes fade

EUR/USD fell to 1.1539 from seven-week highs near 1.1580 as investors weighed stalled US-Iran talks, higher oil prices, and a hawkish Fed note from Beth Hammack ahead of US CPI.

Reported · Written up by our desk · Major Pairs

The euro edged lower against the US dollar on Tuesday, with EUR/USD dipping to 1.1539 in early European trading after recent seven-week highs around 1.1580, according to FXStreet.

FXStreet attributed the move to a stalemate in US-Iran negotiations that has dimmed hopes for a swift resolution involving the Strait of Hormuz, while crude prices have bounced higher. Brent oil is trading above $87 a barrel, about 7.0% higher than last week’s closing price, a factor that can weigh on crude-importing parts of the eurozone.

In the US, Cleveland Federal Reserve President Beth Hammack struck a hawkish tone, supporting the dollar by saying current monetary policy is not hurting the economy and that more than one rate hike may be needed to bring inflation back to target.

With markets described as practically evenly split over September’s decision, traders are looking to Wednesday’s US Consumer Price Index for direction. FXStreet cited expectations for headline inflation to ease to 3.4% year on year in July from 3.5% in June, and core CPI to slow to 2.5% from 2.4%.

Latest closeWTI crude $82.30 ▲5.3%|Brent $87.85 ▲5.2%|EUR/USD 1.155 ▲0.2%

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