Euro Soars Near Seven-Week High as Trump Talks Ease Geopolitical Tensions

The euro has strengthened to near a seven-week high as geopolitical tensions ease between the US and Iran, lifting demand for the single currency. This follows US President Donald Trump's statement that the two countries are engaged in 'very good discussions' about ending their five-month conflict.

Crude oil prices have fallen around 10% this week after President Trump's comments, which raised hopes of a recovery in Middle Eastern energy supplies. Lower energy prices have eased concerns over inflation and weaker economic growth.

The European Central Bank (ECB) is expected to take a gradual approach to policy tightening due to the improved risk sentiment. Markets now fully price in just one additional ECB rate hike by year-end, with around a 40% chance of a second.