The euro fell to around $1.17 on Monday, sliding toward multi-week lows as the dollar strengthened on safe-haven demand following a sharp escalation in the Middle East conflict. The US and Israel carried out strikes on Iran over the weekend, resulting in the death of Iran’s Supreme Leader and the effective closure of the Strait of Hormuz. The common currency also faced pressure from surging energy prices, with Europe poised to secure significant natural gas supplies just as prices spike higher. Meanwhile, data on Friday showed inflation in Germany came in below forecasts in February, while price growth accelerated in France and Spain. Money markets currently assign only about a 30% probability to a rate cut by the ECB by December. On Thursday, ECB President Christine Lagarde said headline inflation is expected to converge toward the 2% target over the medium term, with food inflation, crucial to consumer perception, projected to remain slightly above 2% later this year.
