The euro declined at the start of European trading on Wednesday against a basket of global currencies, extending its losses for a third consecutive session against the US dollar, under negative pressure from investor risk aversion and continued demand for the US currency as the preferred safe-haven asset amid stalled peace talks between the United States and Iran.

This week, markets increased pricing for a European interest rate hike in June. Investors are now awaiting additional economic data from the eurozone to reassess those expectations.

Price Overview

Euro exchange rate today: The euro fell nearly 0.1% against the dollar to $1.1731, from the opening level of $1.1738, while recording a session high at $1.1742.

The euro ended Tuesday trading down around 0.4% against the dollar, marking its second consecutive daily loss due to fading hopes for peace in the Middle East.

US dollar

The dollar index rose 0.1% on Wednesday, maintaining gains for a third straight session and reflecting continued strength in the US currency against a basket of global currencies.

The advance comes as investors continue focusing on buying the dollar as a safe haven, after key US inflation data strengthened expectations that the Federal Reserve could raise interest rates later this year.

US-Iran talks

Hopes for a peace agreement in the Middle East weakened after Trump said the ceasefire with Iran was on the verge of collapse following Tehrans rejection of a US proposal to end the war and its insistence on a list of key demands.

US President Donald Trump said on Tuesday that the financial difficulties facing Americans would not affect his determination to negotiate an end to the war with Iran, stressing that preventing Tehran from obtaining a nuclear weapon remains his top priority.

Trump also confirmed that he is seriously considering relaunching Project Freedom, while announcing plans for an upcoming meeting with a large group of generals and military leaders to discuss available options and strategies regarding the Iranian الملف.

Meanwhile, Iranian Parliament Speaker Mohammad Bagher Ghalibaf said there is no alternative to accepting Irans proposal, stressing that Tehran is ready to respond immediately to any military operations.

European interest rates

With global oil prices rising this week, money markets increased pricing for a 25-basis-point interest rate hike by the European Central Bank in June from 45% to 50%.

Investors are now awaiting additional eurozone economic data on inflation, unemployment, and wages to further reassess those expectations.