EUR/USD Under Pressure as Oil Prices Approach $100 a Barrel

Risk appetite was subdued in the financial markets on Wednesday due to concerns over rising oil prices and the deteriorating situation in the Middle East. The Brent crude price approached the $100 a barrel level, putting pressure on the euro.

The EUR/USD pair is particularly exposed to energy price fluctuations as the eurozone relies heavily on imported energy. A sustained rise in oil prices could have a significant impact on inflation and interest rates, making the ECB's decision on Thursday crucial for the pair's direction.

The US inflation data releases this week will also be closely watched, with producer prices due out between the ECB's decision and President Christine Lagarde's press conference. The consumer price index release on Friday is particularly significant as it will provide an important test of market expectations for US monetary policy.