The euro rose in European trading on Monday against a basket of global currencies, attempting to recover from a seven-month low against the US dollar, supported by relatively active buying from lower levels.

The US currency retreated from its highest levels in ten months as investors assess developments in the Iran war, ahead of a busy week of global central bank meetings.

The European Central Bank meets later this week and is expected to keep interest rates largely unchanged, while providing further clues about the path of European monetary policy this year.

Price Overview

Euro exchange rate today: the euro rose more than 0.35% against the dollar to $1.1456, from Fridays closing level of $1.1414, after recording a session low of $1.1419.

The euro ended Fridays trading down 0.85% against the dollar, marking its fourth consecutive daily loss and recording a seven-month low of $1.1411 due to the escalation of the war in the Middle East.

The euro lost 1.75% against the dollar last week, marking its second consecutive weekly loss due to concerns about the global energy price crisis.

US dollar

The dollar index fell 0.3% on Monday, retreating from a ten-month high of 100.54 points and heading toward its first loss in the past five sessions due to corrective activity and profit-taking.

Beyond profit-taking sales, the US currency weakened at the start of the week against a basket of global currencies as investors continue assessing developments in the Iran war, in addition to awaiting a busy week of monetary policy meetings by major central banks.

At least eight central banks, including the US Federal Reserve, the European Central Bank, the Bank of England, and the Bank of Japan, will meet this week to determine interest rates in their first policy meetings since the start of the conflict in the Middle East.

Carol Kong, currency strategist at the Commonwealth Bank of Australia, said the war poses downside risks to economic growth and upside risks to inflation, meaning central bank responses will largely depend on the current context, specifically whether inflation is above, within, or below target.

European interest rates

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

Amid rising global energy prices, data from the London Stock Exchange Group (LSEG) suggests the European Central Bank is expected to raise interest rates in June.

European Central Bank

The European Central Bank will meet on Wednesday and Thursday of this week in its second monetary policy meeting of 2026, with markets almost fully expecting European interest rates to remain unchanged, marking the sixth consecutive meeting without any change.

Euro outlook

Jane Foley, head of foreign exchange strategy at Rabobank, said in a note that it has become very clear that shipping through the Strait of Hormuz could be affected for some time.

Foley added that Rabobank has therefore lowered its forecasts for the euro/dollar pair over one and three months to 1.14 and 1.15 respectively, down from $1.16.