The euro opened June at $1.166, its highest level since May 14, while holding largely steady from the previous session. Markets are focused on developments in the Middle East conflict as they digest a stream of European economic data. The US and Iran are in talks over extending a ceasefire and reopening the Strait of Hormuz, though the outlook remains uncertain, and Israel’s expanded ground offensive in Lebanon has already ruptured a fragile truce.
On the economic side, German retail sales fell again in April, marking a fourth consecutive monthly decline, though the drop was slightly smaller than anticipated. Investors are now looking ahead to this week’s Eurozone inflation release, after last week’s figures showed EU-harmonized inflation accelerating in May in France, Italy, and Spain, while easing in Germany. Minutes from the ECB’s latest meeting also revealed that some policymakers would have backed a rate increase in April had it been put forward, bolstering expectations for a 25-basis-point hike at the June 11 meeting.
