Euro Rises Ahead of ECB Rate Decision Amid Ongoing Oil Price Volatility

Major currencies were steady on Thursday as oil prices continued to rise above $100 a barrel for a second day. Energy flows from the Gulf have slowed to a trickle following a wave of attacks by Iran and the United States.

The European Central Bank is expected to raise euro zone rates later in the day, its second increase since February. This move aims to tackle inflation concerns, which have sent global bond yields back to multi-decade highs in some countries.

Despite this, safe-haven flows into the dollar have been limited. The euro traded near a two-week high of $1.1654 on Wednesday and was last at $1.1639, up 0.1% on the day.

Richard Franulovich, head of FX strategy at Westpac Institutional Bank, noted that markets are becoming less sensitive to oil shocks as the war drags on. He attributed this to debasement trades, global central bank tightening, and a more interventionist Treasury Department.