- EUR/USD gains ground to around 1.1545 in Tuesday’s early European session.
- The ECB is widely expected to raise its key interest rates at its June policy meeting on Thursday.
- Trump said he might have a proposal for the Iran agreement within days.
The EUR/USD pair gathers strength near 1.1545 during the early European trading hours on Tuesday, bolstered by the hawkish stance of the European Central Bank (ECB). Traders brace for the US Consumer Price Index (CPI) data on Wednesday. On Thursday, all eyes will be on the ECB interest rate decision.
The ECB is set to raise its key interest rate for the first time in almost three years at the upcoming June policy meeting on Thursday, becoming the first of its peers to tighten policy in response to a jump in energy prices caused by the conflict in the Middle East.
“At its 11 June meeting, the ECB is very likely to raise its key interest rates by 25 basis points, in line with its recent hawkish communication,” said Martin Wolburg, senior economist at Generali Investments.
ECB President Christine Lagarde will hold the press conference to deliver the monetary policy statement and take questions from journalists. Any hawkish comments from ECB policymakers could provide some support to the Euro (EUR) against the Greenback in the near term.
US President Donald Trump said on Tuesday that he might have a proposal for the Iran agreement within days, per Reuters. However, the uncertainty surrounding the Middle East remains high. Earlier Monday, Israeli Prime Minister Benjamin Netanyahu said that the war against Iran and its Lebanon-based proxy Hezbollah “has not yet ended,” though he insisted both are weaker than ever. Signs of rising tensions in the Middle East could boost the US Dollar (USD) as a safe-haven currency and act as a headwind for the major pair.
