EUR/USD remains stable at approximately 1.1625 during the early Asian session on Thursday. Trump indicated that discussions with Iran are nearing completion, yet cautioned that there could be attacks if the agreement does not succeed. The Fed has adopted a more aggressive stance, with an increasing number of officials anticipating a scenario involving a rate hike. The EUR/USD pair is currently stable around 1.1625 in the early Asian session on Thursday. The potential upside for the major pair may be constrained, given that uncertainty surrounding US–Iran discussions could elevate the appeal of safe-haven assets. The preliminary readings of the Purchasing Managers’ Index for May from the Eurozone, Germany, and the US are scheduled for release later on Thursday.
US President Donald Trump stated on Wednesday that discussions with Iran were nearing completion, while cautioning of additional strikes unless Iran consents to an agreement. Meanwhile, Iranian President Masoud Pezeshkian asserted that Tehran was not on the verge of capitulation and warned of potential retaliation for any strikes with actions extending beyond the Middle East. Signs of escalating tensions between the US and Iran may strengthen a safe-haven currency like the US Dollar and pose challenges for the major pair.
Additionally, a hawkish stance from the US Federal Reserve could bolster the USD’s upward momentum. According to the April meeting minutes released on Wednesday, a majority of officials indicated that interest rate hikes might be required if inflation continues to stay above the 2% target. Across the pond, a significant majority of economists from the poll, approximately 85%, suggested that the European Central Bank is likely to increase its deposit rate by 25 bps to 2.25% in June. This marks a notable shift from just over half who anticipated such a move prior to the April meeting.