EUR/USD Rises as Trump Delays Iran Strike, Waller Supports July Fed Rate Cut

EUR/USD Rises 0.36% After Trump’s Diplomatic Turn

The Euro to US Dollar (EUR/USD) currency pair climbed 0.36% on Friday to 1.1534, paring weekly losses and ending flat. The move followed US President Donald Trump’s decision to delay a military strike on Iran, opting for diplomacy instead of immediate escalation in the ongoing Israel–Iran conflict. The news spurred risk-on sentiment, favoring the Euro.

Waller Supports July Rate Cut, Contradicts Fed's Cautious Tone

A dovish tone from Federal Reserve Governor Christopher Waller, who voiced support for a rate cut in July, added to Dollar weakness. This position contradicts the more cautious tone of the Fed’s latest monetary policy report, which suggested current policy remains well-positioned amid global uncertainty.

Meanwhile, Richmond Fed President Thomas Barkin warned against rushing into cuts, advocating a wait-and-see approach — highlighting division within the Fed leadership.

Trade Risks Limit Euro Upside

While the Euro gained, upside was capped by mounting US–EU trade tensions, especially ahead of the July 9 deadline for resolving disputes. Additionally, risk appetite weakened after a senior US official pushed to revoke waivers for chipmakers tied to China, shaking tech stocks and pressuring broader market sentiment.

Market Outlook

The EUR/USD pair faces a complex macro backdrop:

• Dovish Fed voices vs. official policy caution
• Geopolitical uncertainty in the Middle East
• Lingering US-China-EU trade tensions

All eyes now turn to upcoming US inflation data, Fed speeches, and further clarity on the Middle East situation.

Internal Linking Suggestions (for Tredu.com):

• What Moves the EUR/USD? A Beginner’s Guide
• Understanding Fed Rate Decisions
• How Geopolitics Impacts Forex Markets