The primary currency pair is below the previous level on Monday. The current EURUSD exchange rate stands at 1.0650.
The US dollar strengthened its position for two reasons. The Federal Reserve’s reactions to the US inflation data delayed the expected timing of a rate cut, pushing it back to September, and the Middle East conflict intensified.
Last week, EURUSD experienced the most significant weekly decline since 2022. US inflation figures were unambiguous: prices remain high. This situation made the Federal Reserve hesitant about its forthcoming decisions. Investors immediately shifted the likely date for an interest rate cut in this monetary cycle from June to September. It seems the Federal Reserve only has two rate cuts left for this year. For comparison, back in January, it was expected that there would be six.
The Middle East disputes are escalating to a new level, reducing risk appetite on the stock market and contributing to demand for the safe-haven US dollar.
Combined, all these factors have worked against the EURUSD, pushing the pair to its lowest value since 11 March.