Rising oil prices are weighing on the EUR/USD pair, which has fallen to 1.177 despite positive risk sentiment typically favoring its appreciation. The market’s skepticism regarding a US-Iran agreement has heightened concerns over geopolitical tensions and potential disruptions in key shipping routes like the Strait of Hormuz. Stronger-than-expected US macro data today, including initial jobless claims at 207K and a robust Philadelphia Fed Manufacturing Index, suggests the Federal Reserve may maintain its current policy stance, especially if oil prices hover around $100.
The outlook for oil and energy prices remains precarious, as Gulf Arab states and European officials estimate that a US-Iran peace deal could take up to six months to finalize. This uncertainty could lead to continued upward pressure on energy prices and exacerbate global supply chain issues, particularly if the Strait of Hormuz remains closed, potentially triggering a broader economic impact.
Market professionals should closely monitor developments in the US-Iran negotiations and oil price movements, as these factors could significantly influence currency valuations and broader market sentiment.
Source: xtb.com