Euro Finds Brief Respite Amid US-Iran Ceasefire and Hawkish Fed Bets

The euro experienced some respite on Tuesday after an U.S.-Iran ceasefire led to a decline in crude oil prices, easing inflation concerns and dampening expectations of further Federal Reserve rate hikes.

However, market concerns about global oil supply disruptions have not yet subsided, with shipping restrictions in the Strait of Hormuz and the Red Sea remaining in place.

The underlying fundamentals continue to favor a stronger U.S. dollar, with inflation risks persisting and supporting dollar bulls.

Market attention is firmly fixed on Thursday's FOMC decision, where the consensus expects the Fed to hold rates steady but the real focus will be on the policy statement and Chairman Powell's press conference.