The euro fell in the European market on Tuesday against a basket of global currencies, moving into negative territory for the third consecutive day against the US dollar, moving away from its highest levels in three months, due to profit-taking and corrective activity.
This decline comes as investors renew their focus on buying the US dollar as a safe haven, after the United States launched the “economic pariah” operation to impose a complete international isolation on Iran.
Price overview
Euro exchange rate today: The euro fell against the dollar by 0.1% to $1.1651, from today's opening price of $1.1664, and recorded a high of $1.1671.
The euro ended Monday's trading down 0.1% against the dollar, its second consecutive daily loss, as profit-taking and corrections continued from its three-month high of $1.1712.
US dollar
The dollar index rose 0.1% on Tuesday, extending its gains for a second consecutive session as it continued to recover from its lowest level in three months, reflecting the continued improvement in the US currency against a basket of major and minor currencies.
Apart from purchases from low levels, buying of the US dollar as a safe haven has resumed, amid escalating fears of renewed military confrontations between the United States and Iran, following Washington’s imposition of severe economic sanctions on Tehran.
US-Iran conflict
The United States has officially launched Operation “Economic Paragon” to impose a complete international isolation on Tehran, with a ban on 5 new vital sectors.
US Treasury Secretary Scott Bisent announced on Monday the start of that process with the aim of cutting off funding sources and economic ties that help Tehran survive.
The US Treasury Department imposed sanctions on approximately 60 entities, individuals, and vessels linked to Iran, spanning the areas of the nuclear program, missiles, cybersecurity, and oil.
The US Treasury Department is also targeting five sectors with potential secondary sanctions: digital assets, technology, gold, aviation, and maritime shipping.
Washington has not yet announced direct sanctions on major Chinese banks, despite China being the main buyer of Iranian oil.
Tehran asserted that the US sanctions would not succeed, and warned that supporting or participating in the sanctions could be treated as an act of war.
European interest rate
The money market pricing of the probability of the European Central Bank raising interest rates by 25 basis points in September has settled at around 50% currently.
In order to reprice those probabilities, investors are awaiting further economic data from the Eurozone regarding inflation, unemployment, and wage levels.
Euro performance forecast
We expect here at the site that the euro will continue to move in negative territory against the US dollar, with increased purchases of the US currency as a safe haven, due to fears of renewed military tensions in the Middle East region.
