EUR/USD is advancing towards the 1.1730 level in the early Asian session on Friday. The ECB maintained its current interest rates during the policy meeting held in April on Thursday. Rising tensions between the US and Iran may bolster the US Dollar, recognized as a safe-haven asset. The EUR/USD pair sees interest from buyers near the 1.1730 level during the early Asian session on Friday. The Euro shows strength against the US Dollar following the European Central Bank decision to maintain interest rates during its April meeting.
The ECB governing council decided to maintain its benchmark deposit facility rate at 2% on Thursday, even in light of the rising inflation in the Eurozone following the onset of the war in Iran. The central bank’s statement indicated that the inflation outlook remains largely stable: “The upside risks to inflation and the downside risks to growth have intensified.” The ECB indicated it would carefully observe the situation and adopt a data-driven, meeting-by-meeting strategy in shaping its monetary policy stance. Analysts foresee a possible 25-basis-point hike, which would elevate the key interest rate to 2.25% during the June meeting.
The current conflict in the Middle East may strengthen a safe-haven currency like the Greenback, potentially creating challenges for the major pair. US President Donald Trump stated that he would maintain a naval blockade of Iranian ports, citing worries that the crucial Strait of Hormuz may not be reopened in the near future, according to a report on Thursday.