FX.co ★ Euro Hovers at $1.15

The euro remained steady at approximately $1.15, maintaining its proximity to the peaks of 2021 recorded earlier this month. Investors are diligently assessing the mounting geopolitical tensions in the Middle East, potential inflationary pressures, and future monetary policy directions. The conflict escalated significantly following the United States' intervention in the war and subsequent strikes on Iran, intensifying concerns about a potential closure of the Strait of Hormuz. This strategic passage is pivotal for global oil shipments, and any disruption could propel oil prices upward. Economically, preliminary PMI data revealed a more severe contraction in France's private sector activity than anticipated. In response, market analysts continue to anticipate a 25 basis points rate reduction by the European Central Bank in September, which would decrease the key deposit rate to 1.75%.