The euro firmed to $1.163, rebounding from a six-week low, as investors welcomed progress in US–Iran talks that pushed Brent crude below the $100-per-barrel threshold. President Donald Trump said a memorandum of understanding between the two countries had been “largely negotiated” and would reopen the Strait of Hormuz. US Secretary of State Marco Rubio called the prospective agreement “pretty solid,” indicating it could pave the way for “very real, significant time-limited negotiations on nuclear matters.”
Meanwhile, recent PMI data showed the Eurozone economy contracted in May at its fastest pace since late 2023, as a war-driven surge in living costs weighed heavily on activity. S&P Global cautioned that the readings suggest inflation is heading toward 4%. Money markets are currently pricing in two additional ECB rate hikes by the end of the year.
