Euro Remains Under Pressure as US-Iran Talks Stall

2026-05-13 09:57 By Joana Ferreira 1 min. read

The euro fell to $1.17, pulling back from near three-week highs, as investors weighed the impact of stalled US-Iran negotiations and mounting expectations for further ECB rate hikes.

Fears over the fragile ceasefire and persistent inflation have led markets to price in three ECB rate increases by year-end, with an over 80% chance of the first hike in June.

ECB President Christine Lagarde reiterated on Friday that the central bank is prepared to act swiftly if necessary, emphasizing that the euro area’s economic position is now stronger than before Russia’s invasion of Ukraine.

Meanwhile, German wholesale prices jumped 6.3% year-on-year in April, the highest since February 2023, amid ongoing Middle East tensions.

Eurostat data also confirmed that the Eurozone economy grew by just 0.1% in Q1 2026, its weakest expansion since Q2 2025.



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