Euro Holds Firm as Middle East Tensions Boost Greenback Demand

The Euro has held onto its gains against the US Dollar as tensions in the Middle East continue to boost demand for the Greenback.

Following last week's weak US jobs report, which showed a loss of 23K jobs in July compared to expectations of an 80K gain, the EUR/USD pair has been consolidating near its highest level since June 17.

The softer labor market data led to a moderation in pay growth, with annual wage inflation slowing to 3.2% from 3.4%, which may counterbalance the argument for additional interest rate increases by the US Federal Reserve.

However, heightened geopolitical risks, particularly around the Strait of Hormuz, have underpinned safe-haven demand for the USD, with the US Dollar Index attempting to extend Friday's late rebound from its lowest level since June 17.