FX.co ★ Euro Holds Near $1.17 Amid Ceasefire Uncertainty

The euro held just below the $1.17 mark as investors assessed the fragility of a ceasefire between the US and Iran. Tensions intensified after Israel launched its heaviest airstrikes to date on Lebanon, causing hundreds of casualties and prompting Iran to threaten retaliation. Tehran ruled out the possibility of further peace talks with Washington, while the ongoing blockade of the Strait of Hormuz further strained the already precarious truce and drove oil prices higher. Compounding the uncertainty, US President Donald Trump stated that American forces would remain stationed near Iran until a “real agreement” is reached. In this environment, markets are now pricing in a greater probability of additional interest rate increases by the European Central Bank, with at least two hikes anticipated by the end of 2026.