EBC Markets Briefing | Euro firms as investor confidence has improved

The euro was little unchanged on Tuesday after Trump signalled that he was prepared to let the mounting economic distress take its toll on Iran rather than launch further military strikes.

Iran maintains that the waterway will stay closed until the US meets its demands, and confirms that talks with Oman regarding shipping agreements will not lead to a complete reopening of the waterway.

Eurozone investor morale turned positive in August, marking its fourth consecutive monthly rise due to sharper current conditions and steady recovery confidence – a sign of resilience amid rising geopolitical tensions.

The ECB paused its tightening cycle in July, but most economists expect further rate hikes. Traders currently price in an 80% probability of a September rate hike, plus a 40% probability of a further increase by December.

According to a Bloomberg survey of analysts, the bloc is now forecast to expand by 0.8% in 2026, a substantial upgrade from the 0.5% growth estimate projected in July, driven by a bumper Q2.

Ukraine's drone war commander stated that recent Crimea strikes are the initial phase of a campaign to stop Russian forces from using the peninsula as a staging ground.

EBC Financial Group analyst says that the single currency consolidated near its resistance level around $1.1543. A clean close below the level will likely trigger a deeper pullback toward the 1.1518–1.1520 area.

Asset Recap

As of market close on 10 August, among EBC major products, WTI crude led gains as doubt grew that the US and Iran will reach a deal to increase ship traffic through the Strait of Hormuz.

Altria Group's drop was largely attributable to a combination of heightened regulatory uncertainty and a shift in macroeconomic sentiment that disproportionately affects high-yield defensive stocks.

The Japanese yen has suffered its sharpest sell-off since February as an American attempt to prop up the ailing currency unravel, which wiped out around half of its gains since last week.

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