EUR/USD is experiencing slight increases, hovering around 1.1385 during the early hours of Tuesday’s Asian session. Trump stated that the US will impose a blockade on Iran in the Strait of Hormuz and levy a 20% fee on ships for safe passage. Traders prepare for the release of the US Consumer Price Index data later on Tuesday. The EUR/USD pair records slight increases around 1.1385 during the Asian trading session on Tuesday. Nonetheless, the potential upside for the major pair may be constrained in light of renewed US military actions against Iran.
Traders are poised to draw further insights from the forthcoming release of the US June Consumer Price Index inflation data, scheduled for later on Tuesday. US President Donald Trump on Monday announced the reinstatement of the US blockade on Iranian maritime traffic, alongside a 20% toll on all cargo being shipped through the Strait of Hormuz. The US military has recommenced strikes on Iran, targeting the port city of Bandar Abbas as well as the Qeshm and Kish islands. In a notable development, Iran has targeted two tankers belonging to the UAE, specifically the Mombasa and Al Bahiyah.
Rising tensions in the Middle East may enhance the appeal of a safe-haven currency like the Greenback, potentially posing challenges for the major pair in the short term. The US CPI inflation report is set to be released on Tuesday, potentially providing insights into the forthcoming actions of the US Federal Reserve. A softer inflation outcome would delay the case for US interest rate hikes and undermine the US Dollar against the Euro.