Euro Holds Near $1.17 Amid Ceasefire Uncertainty

2026-04-09 06:56 By Joana Ferreira 1 min. read

The euro steadied just below the $1.17 level as investors weighed the fragility of a ceasefire between the US and Iran.

Tensions escalated after Israel conducted its most intense airstrikes yet on Lebanon, resulting in hundreds of casualties and triggering threats of retaliation from Iran.

Tehran dismissed the prospect of further peace talks with the US, while the continued blockade of the Strait of Hormuz added pressure to an already fragile truce, pushing oil prices higher.

Adding to the uncertainty, US President Donald Trump declared that US forces would maintain their presence near Iran until a “real agreement” is secured.

Against this backdrop, markets are pricing in a higher likelihood of additional interest rate hikes by the European Central Bank, with at least two increases now expected by the end of 2026.



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Euro Holds Near $1.17 Amid Ceasefire Uncertainty
The euro steadied just below the $1.17 level as investors weighed the fragility of a ceasefire between the US and Iran. Tensions escalated after Israel conducted its most intense airstrikes yet on Lebanon, resulting in hundreds of casualties and triggering threats of retaliation from Iran. Tehran dismissed the prospect of further peace talks with the US, while the continued blockade of the Strait of Hormuz added pressure to an already fragile truce, pushing oil prices higher. Adding to the uncertainty, US President Donald Trump declared that US forces would maintain their presence near Iran until a “real agreement” is secured. Against this backdrop, markets are pricing in a higher likelihood of additional interest rate hikes by the European Central Bank, with at least two increases now expected by the end of 2026.
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The euro climbed to $1.17, its highest level since late February, after the US and Iran struck a two-week ceasefire just hours before President Donald Trump’s deadline expired. The agreement, halting the US-Israel military campaign in exchange for Iran reopening the Strait of Hormuz, has fueled hopes of a temporary de-escalation in the Middle East, though broader tensions remain unresolved. The ceasefire has triggered a shift toward risk assets, with the sharp drop in oil and European gas prices prompting investors to scale back expectations for ECB rate hikes. Markets now anticipate only two rate increases this year, down from three before the truce.
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