The euro fell in European trading on Friday against a basket of global currencies, deepening its losses for the fourth consecutive day against the US dollar and hitting its lowest level in four months. The single European currency is on track for a second straight weekly loss due to the global energy price crisis and its negative impact on the European economy.

The US currency continues to shine in the foreign exchange market as investors keep buying the dollar as the preferred safe-haven asset amid escalating military confrontations between the United States and Israel on one side and Iran on the other.

Price Overview

Euro exchange rate today: the euro fell 0.1% against the dollar to $1.1500, the lowest level since last November, from the session opening level of $1.1511, after reaching a high of $1.1530.

The euro ended Wednesdays session down 0.5% against the dollar, marking its third consecutive daily loss due to renewed concerns about energy prices.

Weekly performance

Over the course of this weeks trading, which officially ends with todays settlement, the euro has declined about 1% against the US dollar so far, heading for a second consecutive weekly loss.

Global energy prices

Energy prices, including oil and natural gas, have surged sharply as Iran escalated attacks on oil facilities and transportation infrastructure across the Middle East, increasing fears of a prolonged conflict and potential disruptions to energy flows.

Irans new Supreme Leader, Mojtaba Khamenei, pledged on Thursday to keep the Strait of Hormuz closed. The Iranian military command warned the previous day that the world should prepare for oil prices reaching $200 per barrel after three more ships were attacked in the blockaded Gulf.

Analysts at Wells Fargo said in a note that the euro faces a difficult situation. Europes natural gas storage refill season is approaching, and the European Union is preparing to start the season with record-low gas levels in storage, meaning it will need to purchase large volumes of energy immediately, with the risk of significantly higher prices.

US dollar

The dollar index rose more than 0.1% on Friday, extending gains for the fourth consecutive session and reaching a four-month high of 99.86 points, reflecting the continued strength of the US currency against a basket of global currencies.

The rally comes as investors continue buying the dollar as a preferred safe-haven asset, with the Iran war approaching its third week and fears growing that the conflict could widen across the Middle East. This has pushed energy prices sharply higher and increased negative pressure on the global economy.

European interest rates

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

Meanwhile, amid rising global energy prices, data from the London Stock Exchange Group (LSEG) suggests the European Central Bank could raise interest rates in June.

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