Euro Surges as Fed Decision Looms Amid Inflation and Middle East Uncertainty
The Euro has strengthened ahead of the European Central Bank's (ECB) policy decision, which is expected to keep interest rates steady at 2.25%. ECB President Christine Lagarde's press conference will be closely watched for clues on future monetary policy.
Meanwhile, the US Dollar faces downward pressure due to renewed inflation concerns triggered by surging energy costs. Despite expectations that the Federal Reserve (Fed) will leave interest rates unchanged, shifting policy expectations and unclear guidance from new Fed Chair Kevin Warsh have added uncertainty to the Dollar's long-term outlook.
The Middle East tensions remain a concern for safe-haven demand, which may restrain the downside of the Greenback. US President Donald Trump's threat to strike Iranian infrastructure has prompted Iran to vow swift retaliation against US-linked energy assets across the region.