2026.08.0307:34:50UTC+00Euro at Over Two-Week High as Middle East Talks Loom

The euro held just above $1.15, hovering near its highest level since June 16, supported by improving risk sentiment after a sharp drop in oil prices. Crude declined on renewed optimism over a potential US-Iran agreement to reopen the Strait of Hormuz, following President Donald Trump’s announcement that fresh talks with Tehran would begin on Monday. This eased concerns about a wider conflict in the Middle East.

The fall in oil prices prompted money markets to slightly pare back expectations for additional tightening by the European Central Bank, although a rate increase by September remains largely priced in. At the same time, stronger-than-expected eurozone data continued to underpin the policy outlook. The bloc’s economy grew 0.4% in the second quarter, beating forecasts of 0.2% and marking its fastest pace of expansion since early 2025. Meanwhile, annual inflation accelerated to 2.9% in July, with both core and services inflation also firming.