The euro rose in the European market on Monday against a basket of global currencies, resuming its gains that had paused on Friday against the US dollar, moving upwards towards its highest level in 3 months, benefiting from the decline of the US currency amid concerns related to the debt crisis in the United States.
US Treasury Secretary Scott Bisnett is scheduled to announce later today details of a new package of economic sanctions against Iran, described as potentially the toughest US sanctions ever imposed on Tehran. Markets are particularly focused on the extent to which these sanctions will target China.
In order to reassess the probabilities of the European Central Bank raising interest rates in September, investors are awaiting further important economic data from Europe.
Price overview
Euro exchange rate today: The euro rose against the dollar by 0.1% to $1.1687, from today's opening price of $1.1675, and recorded a low of $1.1672.
The euro ended Friday's trading down less than 0.1% against the dollar, its first loss in the last three days, due to profit-taking and corrective moves, after earlier hitting a three-month high of $1.1712.
The euro gained 0.95% against the dollar last week, its fourth consecutive weekly gain, supported by the US Treasury Department's intervention in the US bond market to curb long-term bond yields.
US dollar
The dollar index fell by more than 0.1% on Monday, reflecting a decline in the US currency against a basket of major and minor currencies, amid concerns related to the US sovereign debt crisis.
US Treasury Secretary Scott Bessent confirmed the department's readiness to increase its repurchase operations of US Treasury bonds, as part of its efforts to support liquidity and calm turmoil in the debt market.
The U.S. Treasury Department announced last week that it will double the size of its long-term securities repurchase operations during the next quarter, to at least $4 billion per operation.
Investors are awaiting details later today of the new economic sanctions imposed on Iran, and whether they will include China or target Chinese companies and entities dealing with Tehran.
US-Iran conflict
The conflict between the United States and Iran is heading towards a new economic escalation, as the Strait of Hormuz crisis continues and the diplomatic track falters.
Washington is preparing to announce a broad package of economic sanctions against Iran under the name the biggest financial assault in history.
US Treasury Secretary Scott Bisent described the move as one of the most powerful financial attacks Washington has launched against an adversary, and one expected to target the lifeblood of the Iranian economy and its trading partners.
Iranian Foreign Minister Abbas Araqchi downplayed the sanctions, describing them as a “repeated film” that would not frighten Tehran, while the Revolutionary Guard vowed a harsh response to Trump’s economic war.
An Iranian security official also threatened to halt oil exports through the Strait of Hormuz and the Gulf if Washington continues what he called an economic war.
European interest rate
The money market pricing for the probability of the European Central Bank raising European interest rates by about 25 basis points in September is settling at around 50%.
In order to reprice those possibilities, investors are awaiting the release of more economic data in the Eurozone regarding inflation, unemployment and wage levels.
