The euro declined in European markets on Wednesday against a basket of global currencies for the first time in the last eight days against the U.S. dollar, giving up a six-week high due to the activity of correction and profit-taking operations.

This comes in conjunction with the American currency holding above its low levels, awaiting new developments regarding the talks between the United States and Iran, as intensive diplomatic efforts continue to push for a new round of peace negotiations following the stumbling of the previous round hosted by Pakistan.

With the current decline in global oil prices, indications are increasing that inflationary pressures on monetary policy makers at the European Central Bank are receding, which reduces the likelihood of raising European interest rates this year.

Price overview

Euro exchange rate today: The euro fell against the dollar by 0.2% to ($1.1779), from today's opening price of ($1.1795), and recorded a high of ($1.1802).

The euro ended Tuesday's trading up by 0.3% against the dollar, in its seventh consecutive daily gain, within the longest streak of daily gains this year, and recorded a six-week high of $1.1811, amid the possibility of holding a new round of U.S.-Iranian negotiations.

The U.S. Dollar

The dollar index rose on Wednesday by about 0.2%, holding above a six-week low of 97.97 points, on its way toward achieving its first gain in the last eight days, reflecting a recovery in the levels of the American currency against a basket of global currencies.

Aside from buying operations from cheap levels, U.S. dollar levels are recovering as investors refrain from risk, awaiting the emergence of more positive indicators regarding the talks between the United States and Iran.

Diplomatic efforts

Diplomatic efforts continue, sponsored by Pakistan, Turkey, and some other countries, to bring viewpoints closer between the United States and Iran and to push toward engaging in a new round of negotiations, following the stumbling of the previous round held in the Pakistani capital, Islamabad, on Friday.

Media reports confirmed that a new round of negotiations between Washington and Tehran may be held in Islamabad during the coming days, with the Swiss capital, Geneva, proposed as a potential alternative for the second round of U.S.-Iranian negotiations.

Global oil prices

Global oil prices fell on Wednesday by about 1%, continuing their losses for the second consecutive day, with signs appearing that Washington and Tehran continue to revive peace talks, despite the United States beginning a blockade of the Strait of Hormuz.

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.

With the decline in global oil prices, the money market pricing of the probabilities of the European Central Bank raising European interest rates by about 25 basis points in April fell from 35% to 15%.

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 regarding the levels of inflation, unemployment, and wages.