- EUR/USD trades flat around 1.1385 in Monday’s early European session.
- The US and Iran agreed to halt attacks and meet in Doha on Tuesday.
- Traders brace for the ECB’s Lagarde speech on Monday.
The EUR/USD pair holds steady near 1.1385 during the early European trading hours on Monday. Traders continue to assess the developments surrounding talks to end the US war with Iran. The European Central Bank’s (ECB) annual forum and the US June employment data will be the highlights later this week.
CNN reported on Monday that a US official said that the US and Iran will stand down for now after both sides traded fire near the Strait of Hormuz. Two countries plan to meet on Tuesday in Doha, Qatar.
Iran’s Foreign Minister Abbas Araghchi stated that responsibility for the Strait of Hormuz lies solely with Tehran and warned that any attempt to bypass its preferred route in the waterway will cause “tension and escalation.”
The Middle East tensions have continued to stoke inflation pressures, while a surprisingly hawkish debut from Kevin Warsh as a new Federal Reserve (Fed) chair earlier in the month has reversed market expectations for US rate cuts this year. This, in turn, could underpin the US Dollar (USD) against the Euro (EUR) in the near term.
ECB President Christine Lagarde will open the forum on Monday. Her speech could offer some hints about evolving central bank policies amid lower oil prices and stock market volatility. Any hawkish remarks from policymakers could provide some support to the shared currency.
