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2026.03.2609:59:50UTC+00Euro Holds Below $1.16 on Middle East Tensions

The euro hovered below $1.16, pressured as investors moved away from riskier assets amid escalating US-Iran tensions. While Washington maintained that Iran is seeking a deal and simultaneously deployed additional troops to the region, Iran’s foreign minister rejected the prospect of talks and instead demanded control over the Strait of Hormuz. In response, markets are now pricing in two to three ECB rate hikes by year-end, after ECB President Christine Lagarde signaled the bank is prepared to act “at any meeting” to counter inflation risks stemming from energy shocks. Adding to the concerns, German consumer confidence fell to a two-year low ahead of April, underscoring the conflict’s widening economic impact.

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