Euro declines as market caution lifts USD
EUR/USD depreciates after two days of gains, trading around 1.1650 during the Asian hours on Monday. The pair is currently losing ground as the US Dollar (USD) maintains its strength, driven by market participants closely assessing the highly fluid developments surrounding United States (US)-Iran peace negotiations.
Because the Greenback functions as a premier safe-haven asset, any signs of escalating geopolitical friction or a breakdown in Middle East diplomacy could trigger further safe-haven inflows. Consequently, this geopolitical uncertainty continues to create a persistent near-term headwind for the EUR/USD pair.
US President Donald Trump seeks to alter and reinforce several key terms of the proposal aimed at ending the US-Israel war on Iran. According to the BBC, these requested changes specifically target regulations surrounding the strategic Strait of Hormuz and the mandatory removal of highly enriched uranium.
Axios further reported that Trump wants to tighten multiple points of the deal he deems critical, particularly the handling and disposal of Iran’s nuclear material. A senior US official noted that Trump has been briefed that a formal response from Iran regarding these adjusted terms could take up to three days.
Iranian officials are projecting a mix of caution and firm resolve. Iranian Foreign Minister Abbas Araghchi confirmed on Sunday that dialogue and message exchanges with Washington remain ongoing. However, he dismissed current media commentary as mere speculation, emphasizing that it is impossible to evaluate the negotiations until a definitive, clear outcome is reached.
Meanwhile, Iran's parliament speaker and top negotiator, Mohammad Bagher Ghalibaf, established a strict boundary for the talks, asserting that Tehran will not accept any agreement with Washington unless it explicitly ensures that the rights of the Iranian people are secured.
Flash May’s inflation rose in France, Italy, and Spain, but slowed in Germany. All exceeded the European Central Bank (ECB)'s 2% target. Recent ECB Meeting Minutes showed some members favored an April hike, backing expectations of a 25-basis-point increase on June 11.
Traders are shifting their immediate focus to the release of German Retail Sales data for April, which will offer a clearer snapshot of Eurozone consumer health and likely drive the EUR/USD pair's next short-term technical move.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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