The euro rose in European trade on Wednesday against a basket of major rivals, extending gains for the fifth straight session against the dollar, and about to hit a four-year peak as the risk appetite rebounded as the Israel-Iran ceasefire holds.

The odds of an ECB interest rate cut in July dropped considerably as investors await more clues on the future path of monetary policies.

The Price

The EUR/USD price rose 0.2% to $1.1632, with a session-low at $1.1604.

The euro closed up 0.3% against the dollar on Tuesday, the fourth profit in a row, marking a four-year high at $1.1641 after the Israel-Iran ceasefire.

US Dollar

The dollar index fell over 0.15% on Wednesday, extending losses for the third straight loss against a basket of major rivals.

As the Israel-Iran ceasefire holds, the dollar fell after bearish remarks from Fed Chair Jerome Powell boosted the odds of upcoming rate cuts.

European Rates

ECB President Christine Lagarde hinted at the possible end of the current cycle of policy easing, which was in response to a combined shock such as the Covid 19 pandemic, the Ukrainian war, and the energy crisis.

According to a Reuters source, most ECB members now aim at holding interest rates unchanged in July, with the global markets now expecting just an additional 25 basis points of rate cuts by the end of the year.

The odds of a 0.25% ECB rate cut in July now stood below 30%, with traders awaiting more eurozone data and remarks by ECB officials to gather more clues.