The euro declined at the start of European trading on Friday against a basket of global currencies, extending its movement in negative territory for the second consecutive day against the US dollar, amid subdued trading conditions in the foreign exchange market due to the Good Friday holiday.

Demand for the US dollar as a preferred safe-haven asset resumed following US President Donald Trumps address on developments in the Iran war, which included more aggressive remarks than markets had anticipated.

With eurozone inflation exceeding the European Central Banks medium-term target due to rising energy prices, expectations have increased for at least one interest rate hike this year, as markets await further key economic data from the region.

Price Overview

Euro exchange rate today: the euro fell about 0.1% against the dollar to $1.1532, down from the session opening level of $1.1538, with a session high of $1.1545.

The euro ended Thursdays session down 0.45% against the dollar, marking its first loss in three days, following Donald Trumps remarks on the war with Iran.

US dollar

The dollar index rose about 0.1% on Friday, holding gains for the second consecutive session, reflecting continued strength in the US currency against a basket of global currencies.

Dollar buying as a preferred safe-haven asset resumed following US President Donald Trumps address to the nation on developments in the Iran war, during which he confirmed that the United States will continue the war with Iran in the coming weeks.

Later today, the US nonfarm payrolls report for March is due, a key indicator closely watched by the Federal Reserve in determining appropriate monetary policy tools for the worlds largest economy, providing strong signals on the path of US interest rates throughout this year.

European interest rates

European Central Bank President Christine Lagarde said last week that the bank is prepared to raise interest rates even if the expected rise in inflation is temporary.

Data released on Tuesday showed that eurozone inflation exceeded the ECBs target, reaching 2.5% in March amid rising energy prices.

Following the data, money markets increased pricing for the probability of a 25 basis point rate hike by the European Central Bank at the April meeting from 30% to 35%.

Reuters sources indicated that the ECB is likely to begin discussions on raising interest rates at this months meeting.

To reassess these expectations, investors are awaiting further economic data from the eurozone on inflation, unemployment, and wages.