EUR/USD moves up to approximately 1.1590 during the early Asian session on Tuesday. Trump and Vice President JD Vance executed an electronic version of a memorandum of understanding with Iran. The Federal Reserve is poised to maintain its benchmark interest rate at its June policy meeting. The EUR/USD pair is currently positioned in positive territory, trading around 1.1590 during the early Asian session on Tuesday. A deal to reopen the Strait of Hormuz spurred a rally in riskier assets such as the Euro against the US Dollar. Market participants are closely monitoring the upcoming interest rate decision from the US Federal Reserve, scheduled for later on Wednesday.
US President Donald Trump and Vice President JD Vance have both virtually signed an agreement aimed at ending the US blockade of Iranian ports, reopening the Strait of Hormuz, and initiating a 60-day period of nuclear negotiations. The officials indicated that Parliament Speaker Mohammad Bagher Ghalibaf has signed the document representing the Iranian side. Expectations surrounding a potential peace agreement between the US and Iran may offer some support to the shared currency in the short term. Nonetheless, caution persisted as both parties presented contrasting narratives on critical matters. Iran plans to impose specific “fees” in the vital waterway, whereas Trump announced that it would completely reopen on Friday without any tolls.
Trump stated on Monday that should Iran not achieve a conclusive nuclear agreement with the US, he would recommence military actions against Tehran. The Fed is widely anticipated to maintain its benchmark interest rate within the target range of 3.50% to 3.75% during the forthcoming policy meeting on Wednesday. Market participants will pay close attention to the press conference, seeking insights into how the new Fed chair, Kevin Warsh, will guide the US central bank into its forthcoming phase. Any hawkish remarks from Fed policymakers could potentially mitigate the Greenback’s losses and pose a challenge for the major pair.