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2026.05.1208:15:46UTC+00Euro Slips Toward $1.17 on US-Iran Tensions

The euro edged lower toward $1.17, pulling back from near three-week highs as investors weighed escalating US-Iran tensions against mounting expectations of additional ECB rate hikes. Brent crude climbed above $105 per barrel after US President Trump dismissed Iran’s latest peace proposal as unacceptable. Money markets are now pricing in three ECB rate increases this year, assigning more than an 86% probability to the first move in June. ECB President Christine Lagarde reiterated on Friday that the central bank is prepared to act swiftly if necessary, emphasizing that the euro area’s economic position is currently stronger than it was before Russia’s invasion of Ukraine.

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