The euro fell in the European market on Monday against a basket of global currencies, resuming its losses that had paused for two days against the US dollar, and approaching again its lowest levels in 13 months, due to renewed geopolitical tensions in the Middle East after the US and Iran exchanged military strikes.
European Central Bank President Christine Lagarde is scheduled to deliver the opening address at the European Central Bank's central banking forum in Sintra, Portugal, as investors await any new signs or clues that may clarify the path of European interest rates this year.
Price overview
Euro exchange rate today: The euro fell against the dollar by about 0.1% to ($1.1379), from today’s opening price of ($1.1389), and recorded a high of ($1.1393).
The euro ended Friday's trading session up 0.1% against the dollar, marking its second consecutive daily gain, as it continued to recover from a 13-month low of $1.1325.
The euro lost about 0.75% against the dollar last week, its second consecutive weekly loss, due to renewed concerns about the widening interest rate gap between Europe and the United States.
US dollar
The dollar index rose by about 0.1% on Monday, resuming gains that had paused over two sessions as part of a correction and profit-taking from a 13-month high, reflecting a renewed rise in the US currency against a basket of global currencies.
This rise is due to currency purchases as the best alternative investment, especially after renewed military tensions between the United States and Iran, following the Iranian Revolutionary Guard's attack on some ships.
Developments in the Iranian war
The United States and Iran halt hostilities as shipping resumes in the Strait of Hormuz following weekend clashes.
The United States carried out strikes targeting Iranian sites in response to the Iranian Revolutionary Guard targeting some ships in the Strait of Hormuz.
The Gulf states condemned the Iranian missile and drone attacks on Bahrain and Kuwait.
Israel announced that it has renewed its attacks on Hezbollah in southern Lebanon.
Technical negotiations are scheduled to resume tomorrow, Tuesday, in Doha, where the two sides will focus on the disputes related to the Strait of Hormuz, primarily freedom of navigation and the mechanism for managing the maritime passage.
European interest rate
Reports: The European Central Bank is considering suspending the normalization of monetary policy in July if energy prices stabilize at their current levels.
The money market's pricing of the likelihood of the European Central Bank raising European interest rates by about 25 basis points next July is stable around 30%.
In order to reprice the above probabilities, investors are awaiting further economic data from the Eurozone on inflation, unemployment and wage levels.
Christine Lagarde
At 17:30 GMT, European Central Bank President Christine Lagarde will deliver the opening address as the European Central Bank's central banking forum kicks off in Sintra, Portugal.
The speech may include further clarifications regarding inflation developments in the Eurozone, and the European Central Bank's view of the future of interest rates during the current year.
