The euro fell in European trading on Tuesday against a basket of global currencies, extending its losses for a second consecutive session against the US dollar and moving closer to a three-month low, as investors continue to favor the US currency as the most attractive available investment.

To reassess expectations for European interest rates, investors are awaiting a fresh batch of key economic data from the euro area. The closely watched June readings for the major sectors of the European economy are scheduled for release throughout the day.

The Price

Euro exchange rate today: The euro fell 0.1% against the dollar to $1.1419, from an opening level of $1.1428. The session high was recorded at $1.1432.

The euro ended Monday down 0.3% against the dollar, resuming losses that had paused on Friday during a rebound from a three-month low of $1.1418.

US dollar

The US Dollar Index rose 0.1% on Tuesday, maintaining gains for a second consecutive session and moving closer to a 13-month high, reflecting continued strength in the US currency against a basket of major and minor peers.

The advance is being driven by demand for the dollar as the most attractive available investment, particularly after the Federal Reserve's latest hawkish projections, which significantly strengthened expectations for at least one US interest rate increase this year.

This has outweighed the negative impact of declining safe-haven demand following the conclusion of the first round of US-Iran negotiations in Switzerland, which produced a 60-day roadmap aimed at reaching a final agreement between the two sides.

US-Iran negotiations

Technical negotiations officially began this week in Switzerland, with separate working groups established to discuss the nuclear file, economic sanctions, and security in the Strait of Hormuz, as part of efforts to draft a final agreement within 60 days.

The United States has already issued a temporary 60-day license allowing the sale and export of Iranian oil, marking the most significant practical step toward sanctions relief in years.

Reports indicate that Iran has shown a greater willingness to cooperate with inspectors from the International Atomic Energy Agency.

A direct communication channel has been activated in the Strait of Hormuz to prevent military confrontations or maritime incidents that could threaten oil tanker traffic.

European interest rates

Reports: The European Central Bank is considering pausing monetary policy normalization in July if energy prices remain at current levels.

Money market pricing for a 25-basis-point ECB rate hike in July remains stable at around 30%.

To reassess those expectations, investors are awaiting the release of June data on the major sectors of the European economy throughout today's session.

Euro outlook

According to Economies.com forecasts, if the economic data comes in stronger than market expectations, the probability of an additional ECB rate hike later this year will increase, which could support a recovery in the euro against a basket of global currencies.