Euro edges higher above 1.1500 on ECB hike bets, traders eye on Middle East tensions
The EUR/USD pair gains momentum to around 1.1535 during the early Asian trading hours on Monday. Nonetheless, persistent geopolitical tension might cap the upside for the Euro (EUR) against the US dollar (USD). Germany’s Factory Orders and Eurozone Sentix Investor Confidence reports are due later on Monday.
US President Donald Trump said on Sunday that Israel should not retaliate against Iran following its missile barrage, arguing that further action would "blow up" a deal between the three sides. "We don't need another one," Trump told Axios after the Iranian attack before saying he planned to call Israeli Prime Minister Benjamin Netanyahu.
Iranian officials stated it would launch further attacks if Israel continues its offensive in Lebanon, where a deadly Israeli strike hit Beirut on Sunday amid fighting with Iran-backed Hezbollah. Any signs of escalating tensions in the Middle East could boost the Greenback as a safe-haven currency and act as a headwind for the major pair.
Across the pond, the hawkish stance of the European Central Bank (ECB) could provide some support to the shared currency. The European Central Bank (ECB) is likely to raise its deposit rate to 2.25% at its upcoming June policy meeting, with another increase likely in September, a Reuters poll of economists showed.
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