FX.co ★ Euro Slides to Mid-January Lows

The euro weakened toward $1.16, its lowest level since mid-January, as the US dollar strengthened on heightened safe-haven demand following a sharp escalation in the Middle East conflict. US President Donald Trump said US munitions stockpiles at medium and upper-medium grades are at record highs and “virtually unlimited,” suggesting that wars could be sustained “forever.”

At the same time, a surge in natural gas and crude oil prices—driven by the formal closure of the Strait of Hormuz and the continued suspension of Qatari LNG exports—has intensified concerns over global energy supply. Rising energy costs are expected to add to inflationary pressures in Europe, potentially pushing the European Central Bank toward a more hawkish policy stance.

Investors are also awaiting key inflation data from Italy and the wider Eurozone, due later today, for further insight into the region’s price dynamics and the likely path of monetary policy.