The euro fell in European trading on Tuesday against a basket of global currencies, to resume its losses that paused temporarily yesterday against the US dollar, as the focus of investors is currently directed toward buying the American currency as a preferred alternative investment, while awaiting the developments of the Iran war, especially the approaching end of Donald Trumps deadline to reopen the Strait of Hormuz later today.

With the continued rise in global oil prices and eurozone inflation exceeding the European Central Banks medium-term target, the probabilities of raising European interest rates at least once this year increased, pending the release of more crucial economic data in Europe.

Price overview

- Euro exchange rate today: the euro fell against the dollar by about 0.15% to ($1.1524), from the opening price of the day at ($1.1540), and recorded the highest level at ($1.1548).

- The euro ended Mondays trading up by 0.25% against the dollar, in the first gain within the last three days, with renewed hopes of reaching a ceasefire agreement in the Middle East under Pakistani sponsorship.

US dollar

The dollar index rose on Tuesday by 0.15%, to approach its highest levels in several months, reflecting the rise of the American currency against a basket of global currencies.

Buying operations of the US dollar are active as it is the best investment haven, in light of traders anticipation of the deadline set by Washington to reopen the Strait of Hormuz to navigation, with increasing fears of Iranian infrastructure being subjected to attacks in the event of non-compliance.

Iran war updates

- Trump threatens to target civilian infrastructure if Iran does not comply with the deadline later today, Tuesday.

- The Wall Street Journal: Trump in his private talks with officials has become less optimistic about Iran concluding a deal.

- The Wall Street Journal: The gap between the positions of Washington and Tehran cannot be narrowed before the expiration of Trumps deadline.

- Axios: Trump may postpone the attack on Iran if he senses real signs of a deal looming on the horizon.

- Axios: Trump alone is the owner of the decision to begin the destruction of Iranian infrastructure at eight in the evening Tuesday.

Global oil prices

Global oil prices rose by an average of 2.5% on Tuesday, to extend their rise for the third consecutive day, with Brent crude recording the highest level in four weeks at $116.50 per barrel, due to fears of the continued closure of the Strait of Hormuz and the failure of peace negotiations between the United States and Iran.

European interest rates

- Lagarde, President of the European Central Bank, said: the bank is ready to raise interest rates even if the expected rise in inflation is short-term.

- Data last week showed that inflation in the eurozone exceeded the European Central Bank's target to reach 2.5% in March with the rise in energy prices.

- Following that data, the money market pricing of the probabilities of the European Central Bank raising European interest rates by about 25 basis points in this April rose from 30% to 35%.

- Sources reported to Reuters that the European Central Bank is likely to begin discussing raising interest rates during the meeting of this month.

- In order to re-price the above probabilities, investors await the release of more economic data in the eurozone about the levels of inflation, unemployment, and wages.