The euro rose in the European market on Thursday against a basket of global currencies, continuing its recovery for the second day in a row from its lowest level in six weeks against the US dollar, as buying activity continued from low levels, coinciding with a slowdown in demand for the US currency as a safe haven, amid growing optimism about reaching a peace agreement between the United States and Iran.
In order to reassess the likelihood of the European Central Bank raising interest rates at its next June meeting, investors are awaiting the release of key sectoral data for the European economy during May, at various times today.
Price overview
The euro rose against the dollar by about 0.1% to $1.1635, from today's opening price of $1.1624, and hit a low of $1.1616.
The euro ended Wednesday's trading session up about 0.2% against the dollar, after earlier hitting a six-week low of $1.1583.
In addition to buying from lower levels, the euro rose as risk appetite improved in the markets following positive comments on US-Iranian talks.
US dollar
The dollar index fell by about 0.1% on Thursday, extending its losses for the second consecutive session and moving away from its highest levels in a month and a half, reflecting the continued decline of the US currency against a basket of major and minor currencies.
In addition to profit-taking, the US dollar has weakened amid growing hopes that Washington is close to reaching an agreement with Tehran to end the war in the Middle East.
Developments in the Iranian war
US President Donald Trump said the United States is in the final stages of talks with Iran.
Trump added that he was prepared to wait a few days to get the right answer regarding the peace agreement with Iran.
The Iranian Foreign Ministry officially announced that it is currently studying the latest responses and proposals it received from Washington through the Pakistani mediator.
Sources reported that a new round of peace negotiations between the United States and Iran is scheduled to take place in Islamabad after the Hajj season.
Reports also indicated the possibility of the Pakistani army chief visiting Iran on Thursday to announce the final version of the agreement.
European interest rate
Sources indicate that the European Central Bank is highly likely to raise interest rates in June, given inflation expectations that are heading towards an undesirable scenario.
The money market pricing for the likelihood of the European Central Bank raising European interest rates by 25 basis points next June is settling at a level exceeding 70%.
In order to reprice these possibilities, investors are awaiting, at various times, the release of data on the main sectors that make up the European economy during the month of May.
