EUR/USD Falls Below 1.1550 Amid Risk-Off Sentiment and Middle East Tensions

EUR/USD Slides to 1.1530 Amid Risk-Off Mood and Middle East Geopolitical Turmoil

The EUR/USD currency pair dropped sharply to 1.1530 in Friday’s Asian session, breaking its four-day winning streak and retreating from a peak of 1.1631 — its highest level since October 2021.

This pullback comes as the US Dollar (USD) regains strength, supported by safe-haven inflows due to heightened geopolitical tensions in the Middle East.

Israel’s Attack on Iran Drives Market Caution

Risk sentiment soured after Israel launched dozens of airstrikes on Iranian nuclear facilities, triggering global concern over a potential escalation.

🇮🇱 Israeli Defense Minister Israel Katz warned of an imminent missile and drone retaliation from Iran following Israel’s pre-emptive action.

This situation has triggered a flight to safety, boosting traditional safe-haven assets like the US Dollar and weighing on the Euro.

US Officials React: Rubio Urges Iran to Avoid Targeting US Interests

US Secretary of State Marco Rubio clarified that the United States was not involved in the Israeli attacks, stating:

“Our top priority is protecting American forces in the region. Let me be clear: Iran should not target US interests or personnel.”

📌 Related: How Geopolitical Risk is Shaping Forex Markets

Trump’s Steel Tariff Threat Pressures the Greenback

Meanwhile, market focus is also on President Donald Trump’s threat to reinstate 50% tariffs on imported steel derivative products such as dishwashers, washing machines, and refrigerators starting June 23.

These tariffs were initially introduced in March at 25%, later doubled, and now further expanded — signaling growing trade protectionism that could slow global growth.

Inflation Data and Consumer Sentiment in Focus

Despite the USD’s short-term strength, softer US inflation readings and rising expectations for Fed rate cuts later this year are weighing on the Dollar in the medium term.

The upcoming US Michigan Consumer Sentiment report will provide further clues about the health of the American economy and potential shifts in monetary policy.

Conclusion

The EUR/USD pair’s drop reflects a classic risk-off move, driven by geopolitical shocks and reinforced by a renewed US protectionist stance. Traders are advised to monitor Middle East developments, Trump’s tariff actions, and US data releases for directional cues.

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