Euro Falls Amid Strait of Hormuz Uncertainty and Rising Oil Prices
The euro fell against a basket of global currencies on Monday as uncertainty over negotiations between the US and Iran to reopen the Strait of Hormuz grew. The euro retreated from a two-month high against the US dollar, correcting after a strong advance in previous sessions.
With global oil prices rising again, inflationary pressures on European Central Bank policymakers are increasing, strengthening expectations for a European interest-rate hike in September. The probability of a 25-basis-point rate hike rose to 45% from 35%, according to money-market pricing.
The US Dollar Index rose around 0.2% on Monday, reflecting a rebound in the US currency against a basket of global currencies. The uncertainty surrounding negotiations between the US and Iran is also supporting the dollar, alongside bargain buying from lower levels.