Anna 
The EUR/USD pair experienced fluctuations, trading in the lower 1.0600s as of the latest update, following a period of slight recovery from an initial dip. Reports of heightened tensions in the Middle East prompted a flight to safe-haven assets, including the US Dollar (USD), leading to a decline in EUR/USD.
Overnight, news of explosions in Iran’s Isfahan city, reportedly in response to an April 13 drone attack, impacted markets significantly. Demand for safe-haven assets surged, with Gold, CHF, JPY, and USD witnessing increased interest. EUR/USD fell to around 1.0610 on this news, nearing the April 16 year-to-date low of 1.0601, before experiencing a modest rebound to the 1.0630s.
The bullish start for EUR/USD on Thursday, spurred by European Central Bank (ECB) President Christine Lagarde’s remarks on fighting inflation, was short-lived. Lagarde’s comments suggested a potential reluctance to cut interest rates, which typically strengthens a currency by attracting foreign capital. However, sentiments shifted as other ECB officials advocated for rate cuts, with François Villeroy de Galhau emphasizing the necessity of reducing borrowing costs to support growth.
Furthermore, the release of the Philadelphia Fed Manufacturing Survey’s Index Prices Paid component, indicating unexpected inflationary pressures, contributed to EUR/USD’s downward trajectory. Flat Initial Jobless Claims reinforced the perception of ongoing inflationary trends in the US labor market.
Federal Reserve members’ commentary further impacted EUR/USD dynamics, with Atlanta Fed President Raphael Bostic signaling a patient approach to rate cuts, likely not until year-end. New York Fed President John Williams echoed this sentiment, expressing contentment with current monetary policy settings and downplaying the urgency for rate cuts. This hawkish stance favored the US Dollar, exerting additional pressure on EUR/USD.
Amidst evolving geopolitical tensions and central bank remarks, EUR/USD remains subject to volatility, with traders closely monitoring developments for potential market shifts.
