The Euro fell in the European market on Wednesday against a basket of global currencies, continuing its losses for the second consecutive day against the U.S. dollar. This decline is driven by risk aversion as investors focus on purchasing the American currency as the preferred alternative investment, following media reports that the United States will extend its blockade of Iranian ports.

The European Central Bank (ECB) begins its monetary policy meeting later today, with decisions due on Thursday. Markets widely expect interest rates to remain unchanged, while looking for further clues regarding the path of European monetary policy for the remainder of the year.

Price Overview

* Euro Exchange Rate Today: The Euro fell against the dollar by approximately 0.1% to ($1.1705), from todays opening price of ($1.1712), after reaching a high of ($1.1621).

* The Euro ended Tuesday's trading down by less than 0.1% against the dollar, marking its first loss in three days amid concerns that peace talks between the U.S. and Iran have stalled.

The U.S. Dollar

The dollar index rose by 0.1% on Wednesday, continuing its gains for the second consecutive session. This reflects the ongoing ascent of the American currency against a basket of major and minor rivals.

This rise comes as investors prioritize the U.S. dollar as a safe haven amid fears that current diplomatic efforts may falter, increasing the likelihood of renewed military confrontations in the Middle East. Efforts to end the war with Iran have reached an impasse, with Donald Trump expressing dissatisfaction with Tehran's latest proposal, as the U.S. President insists on addressing the nuclear file as a fundamental part of any peace agreement.

Meanwhile, Brent crude remained above 110 dollars per barrel amid reports that the U.S. will extend its blockade of Iranian ports. The results of the Federal Reserve meeting, scheduled for release later today, dominate the scene. The central bank is widely expected to hold rates steady, with focus shifting to its assessment of the war's impact on the economy and the future of Jerome Powell.

European Central Bank

The ECB convenes later today for its third monetary policy meeting of 2026, with decisions to be announced on Thursday. The central bank is expected to keep interest rates on hold for the seventh consecutive meeting.

The policy statement and Christine Lagardes press conference are expected to provide stronger evidence regarding the trajectory of European interest rates this year, especially amid speculation that inflation may accelerate again due to rising global energy prices. Sources told Reuters that the ECB is likely to begin discussing potential rate hikes during this week's meeting.

European Interest Rates

* Money market pricing for a 25-basis-point interest rate hike by the ECB this week remains stable at less than 20%.

* ECB President Christine Lagarde stated that the bank is prepared to raise interest rates even if the anticipated rise in inflation is expected to be short-term.