The euro declined in European trading on Thursday against a basket of global currencies, extending losses for the third consecutive day against the US dollar and approaching a four-month low as investors continued to favor the US currency as a preferred safe-haven asset amid escalating military confrontations in the Middle East.

Global oil prices surged again above $100 per barrel after Irans Revolutionary Guard launched attacks on several oil tankers in the Strait of Hormuz, while Tehran warned the world to prepare for oil prices reaching $200 per barrel.

Price Overview

Euro exchange rate today: the euro fell 0.3% against the US dollar to $1.1532, down from the session opening level of $1.1567, after touching a high of $1.1574.

The euro ended Wednesdays session down 0.4% against the dollar, marking the second consecutive daily loss due to growing speculation about increasing inflationary pressures on policymakers at the Federal Reserve.

US Dollar

The dollar index rose about 0.3% on Thursday, extending gains for the third consecutive session and approaching its highest level in four months, reflecting continued strength in the US currency against a basket of global currencies.

US President Donald Trump said on Wednesday that Washington is in a very good position in its war with Iran and that the United States would pay very close attention to the Strait of Hormuz.

US Central Command also said in a statement that the US military had destroyed 16 Iranian minelaying vessels near the Strait of Hormuz.

Three sources familiar with the matter told Reuters that US intelligence assessments indicate Irans leadership remains largely intact and is not at risk of collapse anytime soon after nearly two weeks of sustained US and Israeli bombing.

Global oil prices

Brent crude surged more than 8% on Thursday, extending gains for the third consecutive day and trading again above $100 per barrel after Iran launched new attacks on oil tankers and energy storage facilities.

Irans military leadership announced Wednesday that the world should prepare for oil prices reaching $200 per barrel after three more vessels were attacked in the besieged Gulf.

Analysts said the International Energy Agencys proposal to release 400 million barrels from strategic reserves a record amount is insufficient to calm concerns about supply disruptions from the Middle East.

The Cboe Oil Volatility Index rose sharply on Wednesday to 121.01 points, its highest level since 2020 at the start of the COVID-19 pandemic, after the index increased in seven of the past eight trading sessions since the current crisis began.

Opinions and analysis

Rodrigo Catril, currency strategist at National Australia Bank in Sydney, said: President Trump continues to say even overnight that the war will end soon. It is not clear to us whether that is really within his control.

Catril added that energy price volatility is likely to persist: The Strait of Hormuz is not only about oil it also involves liquefied natural gas and fertilizers. The longer shipping remains disrupted, the greater the pressure on prices.

European interest rates

Money markets are pricing a 5% probability that the European Central Bank will cut interest rates by 25 basis points at the March meeting.

However, amid rising global energy prices, data from the London Stock Exchange Group suggests the European Central Bank is now expected to raise interest rates in June.

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