Euro Remains Weak Ahead of ECB Decision

2026-07-22 07:18 By Joana Ferreira 1 min. read

The euro traded around $1.14, remaining close to one-year lows as investors awaited Thursday's European Central Bank policy meeting while monitoring the latest developments in the Middle East.

The ECB is widely expected to leave interest rates unchanged after raising them in June, adopting a cautious stance as policymakers assess incoming economic data and geopolitical risks.

Despite an expected pause this week, markets continue to price in around two additional rate hikes by the end of the year, with the next move potentially coming in September.

Persistent concerns that escalating tensions in the Middle East could disrupt global oil supplies have reinforced expectations that inflationary pressures in the euro area may remain elevated.

Brent crude climbed to its highest level in more than a month after President Donald Trump ruled out imminent talks with Iran, warned of further strikes, and pledged retaliation if Iran-backed Houthi rebels in Yemen disrupt shipping through the Red Sea.



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Euro Remains Weak Ahead of ECB Decision
The euro traded around $1.14, remaining close to one-year lows as investors awaited Thursday's European Central Bank policy meeting while monitoring the latest developments in the Middle East. The ECB is widely expected to leave interest rates unchanged after raising them in June, adopting a cautious stance as policymakers assess incoming economic data and geopolitical risks. Despite an expected pause this week, markets continue to price in around two additional rate hikes by the end of the year, with the next move potentially coming in September. Persistent concerns that escalating tensions in the Middle East could disrupt global oil supplies have reinforced expectations that inflationary pressures in the euro area may remain elevated. Brent crude climbed to its highest level in more than a month after President Donald Trump ruled out imminent talks with Iran, warned of further strikes, and pledged retaliation if Iran-backed Houthi rebels in Yemen disrupt shipping through the Red Sea.
2026-07-22
Euro Holds Near $1.14 as ECB Meeting Looms
The euro remained steady just above $1.14 as focus shifts to the European Central Bank’s policy meeting on Thursday. After June’s rate hike, the first in three years, policymakers are expected to maintain rates and adopt a cautious stance. Yet, markets still anticipate about two additional rate increases by the end of the year, driven by rising crude prices, with the first potentially arriving in September. Meanwhile, investors are watching for a possible resumption of US-Iran peace talks following recent escalations. Ongoing Middle East tensions have raised concerns about oil supply disruptions, which could create inflationary pressures in Europe as a net energy importer, potentially pushing bond yields higher.
2026-07-21
Euro Holds Steady as Oil Surges Ahead of ECB Decision
The euro traded around $1.14, below the one-month high reached on June 15, as investors weighed escalating tensions in the Middle East and a sharp rise in oil prices. Brent crude has touched its highest level in more than a month, following its biggest weekly gain since April, after the US and Iran exchanged a series of retaliatory strikes triggered by the deaths of US military personnel. Attention now turns to Thursday’s European Central Bank policy meeting. After raising rates in June for the first time in three years, policymakers are widely expected to leave rates unchanged and adopt a wait-and-see approach. However, markets continue to price in two further ECB rate hikes by early 2027, with the first potentially coming as soon as September.
2026-07-20