Euro Holds Near Multi-Week High on Middle East Peace Hopes

2026-04-15 10:38 By Joana Ferreira 1 min. read

The euro held just below $1.18 on Wednesday, close to its highest level since before the late-February war outbreak, amid optimism over potential progress in US-Iran peace talks.

Mediators reported progress in extending the ceasefire, with both sides agreeing in principle to prolong negotiations focused on Tehran’s nuclear program, the Strait of Hormuz, and war compensation.

US President Donald Trump suggested a deal could be near, though uncertainty remains after the US announced plans to deploy 10,000 more troops to the region soon.

The prospect of dialogue eased oil prices below $100 per barrel and lifted risk appetite.

However, inflationary pressures from elevated energy costs persist, with markets now pricing in at least two ECB rate hikes by year-end.

On Tuesday, ECB President Christine Lagarde acknowledged that higher energy costs have pushed the eurozone off its baseline economic path, though she stopped short of signaling imminent rate increases.



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Euro Holds Near Multi-Week High on Middle East Peace Hopes
The euro held just below $1.18 on Wednesday, close to its highest level since before the late-February war outbreak, amid optimism over potential progress in US-Iran peace talks. Mediators reported progress in extending the ceasefire, with both sides agreeing in principle to prolong negotiations focused on Tehran’s nuclear program, the Strait of Hormuz, and war compensation. US President Donald Trump suggested a deal could be near, though uncertainty remains after the US announced plans to deploy 10,000 more troops to the region soon. The prospect of dialogue eased oil prices below $100 per barrel and lifted risk appetite. However, inflationary pressures from elevated energy costs persist, with markets now pricing in at least two ECB rate hikes by year-end. On Tuesday, ECB President Christine Lagarde acknowledged that higher energy costs have pushed the eurozone off its baseline economic path, though she stopped short of signaling imminent rate increases.
2026-04-15
Euro Hits $1.18 on Middle East Talk Hopes
The euro climbed to $1.18, reaching its highest level since before the outbreak of war in late February, as investors grew optimistic about the potential for Middle East peace negotiations. This optimism persisted even as the US maintained its blockade of Iranian ports, creating a mixed geopolitical backdrop. Negotiating teams from the US and Iran may return to Islamabad this week, just days after their latest round of talks concluded without a breakthrough. The prospect of renewed dialogue was enough to spark a shift toward riskier assets, while oil prices retreated below $100 per barrel. However, inflationary pressures driven by elevated energy costs are likely to persist as long as the Strait of Hormuz remains closed, prompting markets to expect a more hawkish European Central Bank. Traders now price in at least two rate hikes by year-end.
2026-04-14
Euro Falls as US-Iran Tensions Escalate
The euro dipped below $1.17, retreating from a six-week peak of $1.174 reached on Friday, as prospects for a US-Iran peace deal dimmed. Negotiations in Pakistan collapsed after Tehran dismissed Washington’s demands, with both sides showing little willingness to resume talks. Adding to market unease, US President Donald Trump threatened a naval blockade of the Strait of Hormuz and suggested limited military strikes against Iran, despite an existing ceasefire. The strategic waterway’s significance sent oil prices skyrocketing, Brent crude climbed to around $102 per barrel, and led markets to anticipate a more aggressive stance from the European Central Bank, with traders now pricing in nearly three interest rate hikes by year-end, up from two just last week.
2026-04-13