EUR/USD has softened to approximately 1.1530 during the early Asian session on Tuesday. Israeli Prime Minister Netanyahu stated that the conflict with Iran and Hezbollah “has not yet ended.” The ECB is anticipated to increase its key interest rates by 25 basis points during its June meeting on Thursday. The EUR/USD pair is currently experiencing a decline, trading around 1.1530 in the early Asian session on Tuesday, influenced by ongoing uncertainty in the Middle East. Traders are anticipating the release of the US May Consumer Price Index inflation data later on Wednesday for new momentum. On Thursday, all eyes will be on the European Central Bank as it announces its interest rate decision.
Israeli Prime Minister Benjamin Netanyahu stated on Monday that the conflict with Iran and its Lebanon-based proxy Hezbollah “has not yet ended,” while asserting that both entities are currently weaker than ever, according to reports. Earlier Monday, Iran announced the conclusion of its military operations against Israel. However, the central military command issued a warning that if Israel persists in its attacks, including in southern Lebanon, “much harsher and more crushing actions than before will be on the way.” Any indications of escalating tensions in the Middle East may strengthen a safe-haven currency like the Greenback, potentially creating challenges for the major pair.
The European Central Bank is scheduled to convene for its monetary policy meeting on Thursday. Markets have completely accounted for a 25-basis-point rate increase following the rise in Eurozone inflation to 3.2%. At its 11 June meeting, the ECB is very likely to raise its key interest rates by 25 basis points, in line with its recent hawkish communication’, stated Martin Wolburg. Market participants will pay keen attention to the ECB press conference for further insights regarding the interest rate trajectory in the upcoming months. Any hawkish remarks from ECB policymakers may bolster the shared currency in the short term.