FX.co ★ Euro Under Pressure Amid US-Iran Tensions and Spanish Inflation Jump

The euro slipped to $1.152 as traders assessed developments in US–Iran talks, including President Donald Trump’s decision to extend his deadline for an agreement by 10 days to April 6. German Foreign Minister Johann Wadephul confirmed that indirect contacts are under way and that direct talks are planned in Pakistan. However, the subdued market reaction points to skepticism that a breakthrough is near, with many viewing Trump’s move as an attempt to buy time to reinforce the US military presence in the region. At the same time, Spain’s inflation jumped to 3.3% in March—its highest level since June 2024, but still below the 3.9% forecast. Expectations for European Central Bank policy have shifted sharply: markets now anticipate at least two rate hikes this year, with a significant probability of a third, in a complete reversal from earlier pricing that saw a 40% chance of a rate cut in 2026.