FX.co ★ Euro Heads for Over 2% Monthly Loss as Middle East Risks Weigh

The euro held steady at $1.15 at the end of March, on track for a monthly loss of more than 2% against the US dollar. Risk assets were sold off as worries grew over the economic fallout from the escalating conflict in the Middle East, amid reports that thousands of US troops were preparing for a possible ground operation, despite Washington’s insistence that diplomatic talks with Iran remained on track. Investors also shifted their focus to a raft of key economic releases due this week, including flash inflation estimates for March from Europe’s largest economies. Market sentiment on ECB policy has turned sharply more hawkish, with traders now pricing in at least two interest rate hikes this year and an increasing likelihood of a third, a stark reversal from earlier expectations that had implied a 40% probability of a rate cut in 2026.