The euro is holding close to its highest level in roughly two months, with traders weighing conflicting signals over a possible US-Iran deal and the resulting swings in oil prices against the single currency.
EUR/USD has traded in a range roughly between 1.1519 and 1.1573 over the past week, remaining above the $1.155 mark and not far from the two-month peak of around 1.1564 set earlier this month. The move higher has come largely at the dollar’s expense, with the greenback under pressure from this week’s softer inflation data out of the US.
Much of the recent volatility in the pair has been tied to shifting headlines around a potential deal between the US and Iran, particularly regarding the status of the Strait of Hormuz, a key global oil shipping route. Any escalation or de-escalation in that standoff has fed almost immediately into oil prices, which in turn affects inflation expectations and, by extension, currency positioning across major pairs.
With oil-driven inflation risk still an open question and the US dollar broadly softer following this week’s CPI and PPI releases, traders are watching whether the euro can push convincingly above its recent two-month high or whether it stalls as it has on prior attempts. Upcoming US data releases, including jobless claims and consumer sentiment figures, are likely to be the next catalyst for the pair.
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