EUR/USD moves upward, approaching 1.1710 during the early hours of Thursday’s Asian session. Trump indicated that he has not established a definitive timeline for receiving a proposal from Iran. ECB’s Kazaks stated that the central bank possesses the ‘luxury’ to postpone interest rate increases. The EUR/USD pair shows resilience, approaching 1.1710 in the early Asian session on Thursday. The Euro strengthens against the US Dollar as US President Donald Trump’s extension of a ceasefire with Iran revives risk appetites.
Market participants prepare for the upcoming preliminary reading of the S&P Global Purchasing Managers Index, set to be disclosed later on Thursday. As reported on Tuesday that the US is prolonging the ceasefire with Iran at the request of Pakistan as it anticipates a consolidated proposal from Iran. This development alleviates concerns regarding a potential resurgence of conflict that had driven energy prices significantly upward, bolstering the shared currency as a more speculative asset.
Nevertheless, tensions persist as Tehran maintains strict control over the Strait of Hormuz, overseeing the passage through this critical trade route and engaging in hostile actions against vessels. Mohammad Bagher Ghalibaf, Iran’s leading negotiator and parliament speaker, remarked that Israel’s aggressive actions and “flagrant” violations of the ceasefire rendered the reopening of the Strait of Hormuz “impossible”. Trump stated that there is “no time pressure” regarding the ceasefire or discussions with Iran and emphasized that there is “no time frame” for the conclusion of the war.
Officials at the European Central Bank appear to be favoring the decision to maintain interest rates at their current levels during the April policy meeting. Martins Kazaks, a member of the ECB Governing Council, stated on Wednesday that the central bank possesses the ‘luxury’ to delay interest rate increases. In the upcoming April policy meeting, a hold is anticipated; however, analysts at Barclays foresee a shift in focus towards possible 25 basis point hikes in June and September to address the surge in energy-driven inflation.