The euro traded around $1.145, holding just below the one-month high reached on June 15, as investors weighed escalating tensions in the Middle East and a sharp rise in oil prices.

Brent crude has climbed back above $90 a barrel, its highest level in more than a month and following its biggest weekly gain since April, after the US and Iran exchanged a series of retaliatory strikes triggered by the deaths of US military personnel.

Attention now turns to Thursday’s European Central Bank policy meeting.

After raising rates in June for the first time in three years, policymakers are widely expected to leave rates unchanged and adopt a wait-and-see approach.

However, markets continue to price in two further ECB rate hikes by early 2027, with the first potentially coming as soon as September.