EUR/USD Rises to 1.1572 as Market Shrugs Off Iran-Israel Tensions Ahead of US Data

EUR/USD Rises to 1.1572 as Market Shrugs Off Iran-Israel Tensions Ahead of US Data

The EUR/USD pair bounced back, gaining 0.17% to trade at 1.1572 on Monday, as markets appeared to discount the ongoing missile exchanges between Iran and Israel. Despite heightened geopolitical tensions, investor focus shifted to upcoming US economic releases and central bank commentary.

Market Focus: Fed's Dovish Stance and Weak US Data

EUR/USD’s rebound follows a Friday dip of 0.25%, when risk-off sentiment drove demand for the US Dollar amid initial Israel-Iran escalations. However, recent weakness in the Empire State Manufacturing Index, which fell to its lowest level since March, has raised concerns over the strength of the US economy.

At the same time, the Federal Reserve’s increasingly dovish tone, coupled with soft data, has pressured the Greenback. Investors are now closely watching the June 18 Fed meeting, where interest rate projections and economic forecasts will be revealed.

Geopolitical Risk Takes a Back Seat

While Iranian missile attacks targeting Haifa and Tel Aviv made headlines, market participants appear to expect the situation to remain contained, with no immediate risk of broader regional escalation. As a result, risk appetite improved, favoring the Euro and other major currencies over the safe-haven USD.

The White House continues to push for diplomatic engagement, but Tehran’s actions suggest ongoing volatility. Nonetheless, traders are focusing more on economic fundamentals than geopolitics—for now.

ECB in Focus as Policymakers Speak

On the European side, the market is also digesting comments from European Central Bank (ECB) officials, as the bloc's monetary policy direction remains a critical driver for the EUR/USD pair. Their tone and forward guidance will likely influence further price action ahead of key data from both the US and Eurozone.

Conclusion

Despite rising geopolitical tensions, the EUR/USD has recovered strongly, buoyed by dovish Fed sentiment and weak US data. With US retail sales and the June 18 Fed meeting looming, traders should expect elevated volatility and sharp reactions to incoming macroeconomic signals.

Internal Linking Suggestions (for Tredu.com):

• Live EUR/USD Forecasts and Analysis
• Understanding the Impact of Geopolitical Tensions on Forex
• Empire State Manufacturing Index Explained
• Everything You Need to Know About the Fed’s June Policy Meeting