Dutch International: The US-Iraq tension raised the ECB interest rate expectations, but the euro has limited uplink space

On 10 July, Francesco Pesole, an analyst of the Netherlands International Group, indicated that the recent military strikes between the United States and the Islamic Republic of Iran had raised the market ' s expectations of a further interest rate increase for the European Central Bank, but that there was limited room for the euro to benefit. He noted that the renewed escalation of the conflict had led to a retrenchment of the euro’s short-term swing margin against the United States dollar. “Although all this has injected new confidence into the previously declining European Central Bank interest rate hike expected in September, the euro’s strong path against the dollar has been rather narrow from this renewed escalation.” He indicated that the euro against the United States dollar on Friday might stabilize as the market awaited clarity, but there was a risk of falling back below 1.14. Kim Xian