Euro eases from one-week high as traders assess Middle East developments

EUR/USD retreats from a one-week high as the US Dollar rebounds.
Safe-haven demand supports the Greenback amid evolving Middle East developments.
Markets await next week's US and Eurozone inflation data for fresh policy clues.

Vishal Chaturvedi FXStreet

EUR/USD trims gains on Friday as the US Dollar (USD) rebounds while traders digest the latest developments in the Middle East. At the time of writing, the pair is trading around 1.1433, easing from a one-week high of 1.1460 touched earlier during the Asian session.

In a post on Truth Social, US President Donald Trump said Iran had asked to continue talks and that the United States had agreed, while emphasizing that Washington had informed Tehran that the ceasefire was "over."

Trump's remarks came after the US and Iran exchanged military strikes following attacks by Iran's Islamic Revolutionary Guard Corps (IRGC) on commercial vessels transiting the Strait of Hormuz earlier this week.

Earlier on Friday, Reuters reported that Qatari mediators are in Iran for talks aimed at creating conditions for broader negotiations.

As the situation remains fluid, the US Dollar continues to benefit from safe-haven demand. The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, is trading around 100.85 after rebounding from an intraday low of 100.60.

Meanwhile, expectations that the Federal Reserve (Fed) will keep monetary policy restrictive amid heightened inflation risks continue to provide additional support to the Greenback.

According to the CME FedWatch Tool, markets are currently pricing in a 58% probability of a rate hike at the September meeting. At the same time, traders also expect the European Central Bank (ECB) to raise interest rates again later this year.

Attention now turns to next week's final Eurozone inflation data, alongside US Consumer Price Index (CPI), for fresh clues on the interest rate outlook

Societe Generale said EUR/USD has staged a modest rebound after finding support near 1.1325, although the recovery lacks strong bullish confirmation. The bank sees the 1.1475-1.1500 zone as key resistance, while a break below 1.1390 could revive the broader downtrend.

Economic Indicator

Core Harmonized Index of Consumer Prices (MoM)

The Core Harmonized Index of Consumer Prices (HICP) measures changes in the prices of a representative basket of goods and services in the European Monetary Union. The HICP, released by Eurostat on a monthly basis, is harmonized because the same methodology is used across all member states and their contribution is weighted. The MoM figure compares the prices of goods in the reference month to the previous month. Core HICP excludes volatile components like food, energy, alcohol, and tobacco. The Core HICP is a key indicator to measure inflation and changes in purchasing trends. Generally, a high reading is seen as bullish for the Euro (EUR), while a low reading is seen as bearish.

GBP/USD remains offered; bears target 1.3600

GBP/USD now leaves behind part of its recent recovery and revisits the low 1.3600s at the beginning of the week. Indeed, Cable trades with a mild downward bias amid decent gains in the Greenback as investors remain wary of upcoming US data releases and the Jackson Hole event.

EUR/USD slips back to 1.1660, daily lows

EUR/USD remains slightly offered and drops toward the 1.1660 zone to hit daily troughs on Monday. The pair’s decline follows a decent advance in the US Dollar while investors continue to closely follow developments from the US money market.

Gold poised to extend its bullish run

Gold surrenders part of its initial advance, although it keeps its bullish pace well and sound above the $4,600 mark per troy ounce on Monday. The precious metal’s move higher comes despite slight gains in the US Dollar and a modest pullback in US Treasury yields across the curve.

Here's what I learned trading meme coins

I’ve been trading cryptocurrencies for the past seven years, with meme coins becoming one of the most exciting and implacable parts of my experience. I love them because they represent internet culture and community sentiment, and, let’s be honest, extreme speculation. Newly launched meme coins were especially tempting: get in early enough, I thought, and a small bet could turn into a huge return.

Bessent’s presser in focus

Preview: Busy week ahead, with Bessent kicking this off today, with things wrapping up with Warsh at Jackson Hole. For a month that should have been a temporary period of ‘quiet’, we had anything but last week, with the bond market and tariffs front and centre.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.