Hawkish Fed Rhetoric Caps Euro Gains Amid Escalating Global Tensions

The EUR/USD pair traded flat around 1.1590 in early Asian trading on Thursday, as hawkish Federal Reserve rhetoric limited gains for the euro.

Fed Warsh's recent speech contributed to a rise in expectations of a September rate hike, with probabilities reaching 62.3%, up from below 40% previously.

ECB policymaker Gabriel Makhlouf emphasized the central bank's readiness to lift interest rates further if inflation starts moving in the wrong direction.

Rising tensions in the Middle East and a rebound in oil prices also weighed on the euro, as energy markets continue to recover.