The euro climbed above $1.17, its highest level since late February, and was on track for a nearly 1.5% weekly gain against the US dollar. The move came amid optimism over a possible Russia-Ukraine peace agreement and as investors adopted a cautious, wait-and-see stance ahead of US-Iran ceasefire talks scheduled for this weekend. Ukraine’s chief negotiator reported progress in discussions with Russia, raising hopes that the conflict could be resolved sooner than previously anticipated.
At the same time, US and Iranian officials are due to meet on Saturday, though tensions remain high. Tehran has maintained a near-total blockade of the Strait of Hormuz, while US President Trump struck a mixed tone—voicing optimism about a potential agreement but later issuing a warning to Iran over new fees imposed on vessels transiting the strategically crucial waterway.
On the monetary policy front, rising oil prices have intensified inflation concerns, prompting markets to anticipate a more hawkish stance from the European Central Bank. Traders are now pricing in at least two interest rate hikes by the end of 2026.
