The euro remained below $1.14, as investors assessed the ECB's policy decision, new US tariffs, and escalating tensions in the Middle East. The ECB left interest rates unchanged as expected but strongly signaled that a September rate hike is increasingly likely.
Rising energy prices, with oil nearing $100 per barrel and natural gas surging amid the US-Iran conflict, have reinforced inflation concerns and strengthened expectations that the ECB will resume tightening after the summer, when updated economic forecasts are released.
Several ECB policymakers, including Bundesbank President Joachim Nagel, warned that inflation risks remain elevated and that further rate increases may be needed.
Meanwhile, the US imposed new tariffs on imports from 60 trading partners, including the EU. The European Commission gave the measures a cautious welcome, saying they are broadly consistent with the tariff commitments agreed under the EU-US Joint Statement.