Euro Dips Amid Middle East Crisis and Plummeting Sentiment

2026-04-21 12:27 By Joana Ferreira 1 min. read

The euro traded just below $1.18, pulling back from last week’s three-week highs, as investors closely monitored escalating Middle East tensions and the European Central Bank’s cautious outlook.

US President Donald Trump confirmed that the two-week ceasefire between Washington and Tehran will expire Wednesday evening, but Iran’s state broadcaster IRIB denied reports that an Iranian delegation had traveled to Pakistan for talks with the US, contradicting earlier claims.

Meanwhile, Eurozone investor sentiment crashed to its lowest since December 2022, amid fears the conflict could disrupt energy supplies and supply chains.

ECB President Christine Lagarde warned that the Eurozone’s economic outlook “remains deeply uncertain” as the Middle East conflict, including the Strait of Hormuz blockade, has disrupted Europe’s energy security, calling the supply shock “enormous.” While energy prices haven’t yet triggered the ECB’s worst-case scenario, she stressed the outlook remains fragile.



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Euro Dips Amid Middle East Crisis and Plummeting Sentiment
The euro traded just below $1.18, pulling back from last week’s three-week highs, as investors closely monitored escalating Middle East tensions and the European Central Bank’s cautious outlook. US President Donald Trump confirmed that the two-week ceasefire between Washington and Tehran will expire Wednesday evening, but Iran’s state broadcaster IRIB denied reports that an Iranian delegation had traveled to Pakistan for talks with the US, contradicting earlier claims. Meanwhile, Eurozone investor sentiment crashed to its lowest since December 2022, amid fears the conflict could disrupt energy supplies and supply chains. ECB President Christine Lagarde warned that the Eurozone’s economic outlook “remains deeply uncertain” as the Middle East conflict, including the Strait of Hormuz blockade, has disrupted Europe’s energy security, calling the supply shock “enormous.” While energy prices haven’t yet triggered the ECB’s worst-case scenario, she stressed the outlook remains fragile.
2026-04-21
Euro Slips Below $1.18 Amid Middle East Tensions
The euro traded just below $1.18 on Tuesday, retreating from last week’s three-week highs, as investors focused on escalating Middle East tensions and the European Central Bank’s cautious stance. US President Donald Trump confirmed that the two-week ceasefire between Washington and Tehran will expire on Wednesday evening, while US Vice President JD Vance and an Iranian delegation are set to arrive in Pakistan later today for peace talks. Ahead of the ECB’s upcoming monetary policy decision, where no rate changes are expected, President Christine Lagarde warned that the Eurozone’s economic outlook “remains deeply uncertain.” Lagarde warned that the Middle East conflict, including the Strait of Hormuz blockade, has disrupted Europe’s energy security, calling the supply shock “enormous.” While energy prices haven’t yet triggered the ECB’s worst-case scenario, she stressed the outlook remains fragile.
2026-04-21
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.
2026-04-20