Euro Little Changed as Traders Assess Middle East Developments

2026-04-20 07:58 By Joana Taborda 1 min. read

The euro was little changed around $1.18, trading only slightly below the pre-conflict levels reached last week, as markets absorbed fresh setbacks in negotiations between the US and Iran.

Tensions escalated over the weekend after the US Navy fired upon and boarded an Iranian-flagged cargo ship.

This reversal came swiftly: on Friday, Iran’s foreign minister had stated the strait would remain fully open to commercial traffic during the 10-day ceasefire between Israel and Lebanon.

Also, there is no clarity on whether US and Iranian officials will meet ahead of the expiry of the 14-day ceasefire between the two countries on Tuesday.

Meanwhile, the ECB is set to decide later this month, with no changes in borrowing costs expected at this meeting.

Instead, focus remains on the June meeting, although the evolving situation in the Middle East could alter the outlook.

On Friday, the IMF said it expects the ECB to raise rates by around 50bps in 2026 to maintain a neutral policy stance.



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Euro Little Changed as Traders Assess Middle East Developments
The euro was little changed around $1.18, trading only slightly below the pre-conflict levels reached last week, as markets absorbed fresh setbacks in negotiations between the US and Iran. Tensions escalated over the weekend after the US Navy fired upon and boarded an Iranian-flagged cargo ship. This reversal came swiftly: on Friday, Iran’s foreign minister had stated the strait would remain fully open to commercial traffic during the 10-day ceasefire between Israel and Lebanon. Also, there is no clarity on whether US and Iranian officials will meet ahead of the expiry of the 14-day ceasefire between the two countries on Tuesday. Meanwhile, the ECB is set to decide later this month, with no changes in borrowing costs expected at this meeting. Instead, focus remains on the June meeting, although the evolving situation in the Middle East could alter the outlook. On Friday, the IMF said it expects the ECB to raise rates by around 50bps in 2026 to maintain a neutral policy stance.
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