Euro edges lower below 1.1550 as US launches self-defense strikes against Iran

The EUR/USD pair loses momentum to near 1.1540 during the early Asian session on Wednesday. Renewed tensions in the Middle East following the US attack on Iran drag the Euro (EUR) lower against the US Dollar (USD). Traders brace for the US May Consumer Price Index (CPI) inflation data, which is due later on Wednesday. 

US officials said early Wednesday that the second round of strikes in Iran is taking place now, targeting air defense and radar systems, per Axios. This action came as Washington launched retaliatory strikes against Iran on Tuesday in what it called a proportional response to the shooting down of a US helicopter gunship near the Strait of Hormuz a day earlier. 

Signs of rising tensions between the US and Iran could boost the Greenback as a safe-haven asset and create a headwind for the major pair in the near term. 

However, expectations that the European Central Bank (ECB) would raise rates at its June policy meeting on Thursday might help limit the shared currency’s losses. “At its 11 June meeting, the ECB is very likely to raise its key interest rates by 25 basis points, in line with its recent hawkish communication,” said Martin Wolburg, senior economist at Generali Investments.