EUR/USD eased to around 1.1465 in Thursday’s Asian session amid growing geopolitical tensions and cautious market sentiment. The euro weakened against the US dollar as investors adopted a risk-off stance due to escalating conflicts in the Middle East. Traders are closely watching upcoming speeches from key European Central Bank (ECB) officials, including Christine Lagarde, Joachim Nagel, and Luis de Guindos, for guidance.
The US Federal Reserve held its key interest rate steady at 4.25%-4.50% during its June meeting on Wednesday, maintaining the range set since December. The Fed signaled a slower pace of rate cuts ahead, reflecting concerns that US tariffs imposed by President Donald Trump could drive consumer prices higher. The Federal Open Market Committee’s projections, known as the “dot plot,” suggest two rate cuts may still occur before the end of the year.
Adding to market uncertainty, Bloomberg reported early Thursday that US officials are preparing for a possible strike on Iran, potentially as soon as this weekend. The prospect of direct US military involvement raises fears of a broader conflict, which has supported demand for safe-haven assets like the US dollar and pressured the EUR/USD pair lower.
Meanwhile, hawkish comments from ECB policymakers may help limit losses for the euro. ECB President Christine Lagarde stated that the cycle of rate cuts is coming to an end, emphasizing that the bank is now “in a good position” to manage current uncertainties.
