Euro Bounces Off Six-Week Low

2026-05-28 14:40 By Joana Ferreira 1 min. read

The euro edged higher to $1.164, attempting to recover from a six-week low as markets assessed both Middle East developments and shifting expectations for European monetary policy.

According to Axios, US and Iranian negotiators have reportedly agreed on a 60-day memorandum of understanding to extend a ceasefire and open talks on Iran’s nuclear program, though final approval from President Trump is still pending.

While the diplomatic outlook offered some support for risk sentiment, geopolitical tensions remain elevated.

At the same time, investors parsed the latest European Central Bank meeting minutes, which showed several policymakers viewed the April decision to hold rates as a close call, with some indicating they would have supported a hike had it been proposed.

Money markets are now pricing in an almost fully expected 25-basis-point rate hike on June 11, with at least one additional increase anticipated by year-end.



News Stream
Euro Bounces Off Six-Week Low
The euro edged higher to $1.164, attempting to recover from a six-week low as markets assessed both Middle East developments and shifting expectations for European monetary policy. According to Axios, US and Iranian negotiators have reportedly agreed on a 60-day memorandum of understanding to extend a ceasefire and open talks on Iran’s nuclear program, though final approval from President Trump is still pending. While the diplomatic outlook offered some support for risk sentiment, geopolitical tensions remain elevated. At the same time, investors parsed the latest European Central Bank meeting minutes, which showed several policymakers viewed the April decision to hold rates as a close call, with some indicating they would have supported a hike had it been proposed. Money markets are now pricing in an almost fully expected 25-basis-point rate hike on June 11, with at least one additional increase anticipated by year-end.
2026-05-28
Euro Drops Near Six-Week Low Amid Middle East Unrest
The euro fell to $1.161, nearing a six-week low, as rising Middle East tensions dimmed hopes for a swift resolution to reopen the Strait of Hormuz and fueled concerns about the Eurozone’s economic health. Brent crude climbed to around $97 a barrel after reports of US airstrikes on an Iranian military site and new sanctions targeting Iran’s revenue from ships transiting the strait. A US official emphasized the defensive nature of the strikes and reaffirmed the country’s commitment to last month’s ceasefire. Adding to the unrest, Kuwait reported countering hostile drone and missile threats, deepening regional instability. Money markets increased their bets on European Central Bank interest rate hikes, pricing in just under 65 basis points of tightening this year, up from just under 60 basis points late on Wednesday.
2026-05-28
Euro Near Six-Week Low Amid US-Iran Optimism
The euro hovered around $1.164, close to a six-week low, amid optimism over a potential US-Iran peace deal and reduced expectations for ECB rate hikes. Investors continue to monitor Middle East developments, encouraged by the recent lack of negative signals from both sides and persistent hopes that an agreement to ease tensions and reopen the Strait of Hormuz remains possible despite recent strikes. Money markets now expect the ECB deposit rate to reach 2.6% by December, up from the current 2% but below last week’s 2.75% projection, with an 80% chance of a rate hike next month. Meanwhile, ECB official Isabel Schnabel told Reuters the central bank should still raise interest rates in June even if a peace deal is reached, citing the scale and persistence of the energy shock.
2026-05-27