Euro Slumps as Middle East Tensions Weigh on Market Sentiment

The euro has hit its lowest level since late July, falling to $1.145 as investors assess developments in the Middle East.

The USD remains supported by expectations of further Federal Reserve rate hikes.

Brent crude prices have resumed their decline after reports that Iran offered to reopen the Strait of Hormuz within seven days if Washington lifts its military blockade of Iranian ports.

ECB's Chief Economist Philip Lane has warned that a new wave of higher energy prices could keep Eurozone inflation elevated for longer than initially anticipated, potentially resulting in higher and more persistent inflation before a decline towards the ECB's target from mid-2027.