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2026.04.1608:29:18UTC+00Euro at Pre-War Levels

The euro traded close to $1.18, remaining near its pre-war highs, buoyed by broad-based dollar weakness as investors grew more confident that diplomacy could help resolve the US–Iran conflict. Reports suggest both sides are weighing a two-week extension of the ceasefire to allow more time for talks, with a second round of negotiations expected soon. Against this backdrop, oil prices have retreated from recent peaks, easing inflationary pressures and leading traders to pare back expectations for near-term ECB tightening. Markets now anticipate two 25-basis-point rate hikes this year, down from three projected just a few weeks earlier. Earlier in the week, ECB President Lagarde noted that elevated energy costs have pushed the eurozone off its baseline economic path, but she stopped short of signaling any imminent rate increases.

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