- The euro is affected despite the stable inflation data of the EU, since geopolitical tensions drive the US dollar.
- Israel’s attack Iran triggers flows to the safe shelter in the dollar; The EUR/USD falls from 1.16 to 1,1488 intradic.
- Tehran cancels nuclear negotiations; The feeling of risk deteriorates, eclipssing the soft US inflation.
- The industrial production of the Eurozone contracts drastically; The German CPI remains stable at 2.1%, but French and Spanish inflation falls below the objective of the ECB.
The EUR/USD ends a four -day winning streak, registering losses on Friday, since the appetite for the risk is affected after Israel’s attack to Iran, which increases the attractiveness of the US dollar’s safe refuge (USD). At the time of writing, the PAR quotes around 1,1530, with a fall of 0.36%.
The feeling changed to negative after the last minute news that revealed the attack of Israel, which aimed to officials of Iranian militias, facilities and nuclear centers. Consequently, Iran replied by sending more than one hundred drones and canceling the sixth round of nuclear negotiations, according to Tehran Times.
In the holders, the US dollar was seen in front of most of the G7 coins, with the euro being barely affected, since the torque reached 1,1488, with a fall of almost 0.80% in the day.
According to Reuters, US president Donald Trump said it is not clear if Iran still has a nuclear program. He said: “I tried to save Iran from humiliation and death,” adding that he is not worried about a regional outbreak.
Recently, US data (USA) revealed that consumers are increasingly optimistic about the economy, according to the University of Michigan (UOM). As for inflation expectations, Americans still see prices above the 2% target of the Federal Reserve (Fed), despite the fact that inflation data published during the week increased the bets that the Fed could cut rates in 2025.
In the Eurozone (EU), Germany inflation figures for May remained unchanged at 2.1% year -on -year, as expected. Inflation in France and Spain remains below the 2% target of the European Central Bank (ECB). Industrial production throughout the area collapsed in April, after a 2.4% growth in March, and stood at -2.4% year -on -year, which is below the forecasts of a 1.7% contraction.
Daily summary of market movements: EUR/USD collapses in an environment of risk aversion, promoting the dollar
- Despite the withdrawal, the EUR/USD seems prepared to resume its upward trend, since ECB officials have become slightly more aggressive, and the news that conversations between the US and China could provide relief to investors. However, an escalation of the Israel-Iran war exerts the downward pressure.
- The feeling of the consumer of the University of Michigan rose to 60.5 in June from 52.2, reflecting a growing optimism among homes. Inflation expectations were softened, with the perspective at one year falling from 6.6% to 5.1% and the five -year forecast lowering 4.2% to 4.1%.
- Next week, the US Federal Reserve is expected to maintain interest rates without changes in the June 17-18 meeting. The operators had incorporated the expectation that the rates would remain unchanged, but what they are observing is the update of the Summary of Economic Projections (SEP).
- Financial market participants do not expect the ECB to reduce their deposit rate at 25 basic points (PBS) at the July monetary policy meeting.
Euro price this week
The lower table shows the percentage of euro change (EUR) compared to the main currencies this week. Euro was the strongest currency against the Australian dollar.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -1.29% | -0.28% | -0.66% | -0.74% | 0.12% | 0.00% | -1.28% | |
| EUR | 1.29% | 1.01% | 0.61% | 0.54% | 1.45% | 1.29% | -0.00% | |
| GBP | 0.28% | -1.01% | -0.31% | -0.47% | 0.44% | 0.28% | -1.01% | |
| JPY | 0.66% | -0.61% | 0.31% | -0.07% | 0.74% | 0.61% | -0.74% | |
| CAD | 0.74% | -0.54% | 0.47% | 0.07% | 0.86% | 0.75% | -0.54% | |
| Aud | -0.12% | -1.45% | -0.44% | -0.74% | -0.86% | -0.15% | -1.43% | |
| NZD | 0.00% | -1.29% | -0.28% | -0.61% | -0.75% | 0.15% | -1.28% | |
| CHF | 1.28% | 0.00% | 1.01% | 0.74% | 0.54% | 1.43% | 1.28% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the euro of the left column and move along the horizontal line to the US dollar, the percentage change shown in the box will represent the EUR (base)/USD (quotation).
Technical perspective: EUR/USD is maintained below 1,1550 while the US dollar returns a return
The EUR/USD bullish trend is maintained, since the torque has registered a successive series of higher maximum and minimum. In addition, the momentum remains bullish, as indicated by the relative force index (RSI), which is maintained above its neutral level of 50 despite pointing down.
That said, the first resistance for the EUR/USD is 1,1550. A rupture of this level will present 1.16 and the peak of the year to date (YTD) of 1,1631. Once surpassed, the following objective will be 1.17. On the contrary, if the EUR/USD remains below 1,1550, a setback is expected to 1.15. Once surpassed, the next stop would be 1,1450, followed by the simple mobile average (SMA) of 20 days in 1,1386.
Euro Faqs
The euro is the currency of the 19 countries of the European Union that belong to the Eurozone. It is the second most negotiated currency in the world, behind the US dollar. In 2022, it represented 31 % of all foreign exchange transactions, with an average daily business volume of more than 2.2 billion dollars a day. The EUR/USD is the most negotiated currency pair in the world, with an estimate of 30 %of all transactions, followed by the EUR/JPY (4 %), the EUR/GBP (3 %) and the EUR/AU (2 %).
The European Central Bank (ECB), based in Frankfurt (Germany), is the Eurozone reserve bank. The ECB establishes interest rates and manages monetary policy. The main mandate of the ECB is to maintain price stability, which means controlling inflation or stimulating growth. Its main tool is the rise or decrease in interest rates. Relatively high interest rates (or the expectation of higher types) usually benefit the euro and vice versa. The GOVERNMENT BOOK of the ECB makes decisions about monetary policy in meetings that are held eight times a year. The decisions are made by the directors of the National Banks of the Eurozone and six permanent members, including the president of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the harmonized consumer prices index (IPCA), are an important economic indicator for the euro. If inflation increases more than expected, especially if it exceeds 2% of the ECB, it forces the ECB to rise interest rates to control it again. Relatively high interest rates compared to their counterparts usually benefit the euro, since they make the region more attractive as a place for global investors to deposit their money.
Published data measure the health of the economy and can have an impact on the euro. Indicators such as GDP, manufacturing and services PMIs, employment and consumer trust surveys can influence the direction of the single currency. A strong economy is good for the euro. Not only attracts more foreign investment, but it can encourage the ECB to raise interest rates, which will directly strengthen the euro. Otherwise, if economic data is weak, the euro is likely to fall. The economic data of the four largest economies in the euro zone (Germany, France, Italy and Spain) are especially significant, since they represent 75% of the economy of the euro area.
Another important fact that is published on the euro is the commercial balance. This indicator measures the difference between what a country earns with its exports and what you spend on imports during a given period. If a country produces highly demanded export products, its currency will gain value simply by the additional demand created by foreign buyers seeking to buy those goods. Therefore, a positive net trade balance strengthens a currency and vice versa in the case of a negative balance
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
