The euro rose in European trading on Friday against a basket of global currencies, in an attempt to recover after three consecutive days of losses against the US dollar, benefiting from a slowdown in the US currency after Donald Trump announced a new delay in targeting Iranian energy facilities, which renewed hopes of reaching a ceasefire agreement in the Middle East.

Following more hawkish comments from the President of the European Central Bank this week, expectations for at least one interest rate hike this year have increased. To reassess those expectations, markets are awaiting further data on developments in the eurozone economy.

Price Overview

Euro exchange rate today: the euro rose 0.15% against the dollar to $1.1542, up from the session opening level of $1.1526, after hitting a low of $1.1524.

The euro ended Thursdays session down 0.3% against the dollar, marking its third consecutive daily loss, after Iran denied entering negotiations with the United States to end the war in the Middle East.

US dollar

The dollar index fell 0.1% on Friday, heading toward its first loss in the past four sessions, reflecting a slowdown in the US currency against a basket of global currencies.

This comes as traders assess the likelihood of a halt in the war in the Middle East, amid intensified diplomatic efforts aimed at containing the escalation, with cautious anticipation of any signals that could pave the way for a de-escalation agreement or ceasefire.

Iran war developments

US President Donald Trump announced an extension of the delay in strikes on Iranian energy facilities for an additional 10 days, through April 6, noting that negotiations to end the war are progressing very well.

US Special Envoy Steve Witkoff confirmed that a 15-point peace proposal had been presented to Tehran via Pakistan, which is acting as a mediator alongside Egypt and Turkey.

The proposal includes a ceasefire and sanctions relief in exchange for Iran abandoning its nuclear program and reopening the Strait of Hormuz.

Iranian sources described the US proposal as unfair and one-sided, while state media expressed doubts about Washingtons seriousness, stressing that attacks will not stop without real guarantees.

The Wall Street Journal reported on Thursday that the Pentagon is also considering sending up to 10,000 additional ground troops to the Middle East.

Global oil prices

Global oil prices rose slightly on Friday, extending gains for the third consecutive day, as markets await further evidence of engagement between the United States and Iran in negotiations to de-escalate military tensions and reopen the Strait of Hormuz.

Carol Kong, a currency strategist at Commonwealth Bank of Australia, said the conflict does not appear likely to end soon, adding that the US dollar remains the strongest currency as long as the conflict continues.

Kong added that if expectations of a prolonged conflict prove correct, oil prices are likely to continue rising, which would further strengthen the dollar at the expense of net energy importers such as the Japanese yen and the euro.

European interest rates

ECB President Christine Lagarde said on Wednesday that the bank is ready to raise interest rates even if the expected rise in inflation is temporary.

Following those comments, money markets increased pricing for a 25-basis-point rate hike by the European Central Bank at the April meeting from 25% to 35%.

Sources told Reuters that the European Central Bank is likely to begin discussing interest rate hikes next month.

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