Impass in the Middle East and the euro rate
The United States and Iran could return to the negotiating table later this week, foreign media report.
The talks will likely take place for the second time in Pakistan, where Washington and Tehran representatives failed to reach a compromise on the key points of the dispute last weekend.
“Considering how unsuccessful the first round of negotiations was last weekend, the current dollar rate levels seem to reflect a premature optimism. Consequently, the risk balance increasingly tilts in favor of strengthening the dollar,” analysts at ING Think said.
An additional factor supporting this sentiment is the recurring tariff issue.
Scott Bessent, U.S. Treasury Secretary, suggested that trade restrictions could return to pre‑Supreme Court ruling levels in July.
“This could further reinforce the downward trend of the U.S. dollar,” economists say.
The failure of the first attempt to end the Middle East conflict worried market participants looking for any “breaks” in the tense U.S.–Iran relations.
“Yesterday we argued that for the EUR/USD rate to rise above 1.180 to be sustainable, greater clarity on the peace plan would be needed. It is still lacking, but markets seem to increasingly anticipate a positive outcome. At this stage risk seems to lean more towards declines, although tangible progress in negotiations could still allow the rise to extend above 1,1850 by the end of the week,” the ING Think report reads.
Experts also noted news about European Central Bank policy, specifically the speech by President Christine Lagarde.
“Christine Lagarde did not provide any new guidance in her speeches in the United States yesterday. She did, however, note that the economy is currently between the ECB’s baseline and pessimistic scenarios. This can be read as a slightly dovish tone, though without reference to inflation dynamics or monetary policy reactions it remains incomplete,” analysts said.
“Importantly, other ECB members did not adopt a more dovish tone: Dolenc and Makhlouf openly discussed hikes, while Rehn maintained a more general tone of caution,” they added.
The bank expects the ECB to implement two rate hikes, despite a gradual easing of concerns about escalation in the Middle East.
“Nevertheless, marginal support for the euro is weakening, and other European developed market currencies are outperforming the euro this week. Lagarde speaks again in Washington today with several other ECB members,” they summarized.
Source: Trading Economics.
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Euro and dollar rates on Wednesday, April 15
The euro to zloty rate on Wednesday, April 15 is at 4,24 PLN.
Chart. Euro to zloty (EUR/PLN)
Source: TradingView.
The euro to dollar rate reaches 1,17 USD.
Chart. Euro to dollar (EUR/USD)
Source: TradingView.
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