Euro edges lower to near 1.1600 on US-Iran peace deal uncertainty

• EUR/USD posts modest losses near 1.1615 in Friday’s early European session. 
• Mixed signals on the progress of US-Iran ceasefire talks continued to keep traders cautious. 
• The ECB June rate hike case is nearly sealed, but July is fully open, said Reuters.  

The EUR/USD pair trades with mild losses around 1.1615 during the early European trading hours on Friday. The Euro (EUR) remains weak against the US Dollar (USD) amid mixed headlines surrounding the US-Iran peace deal. Germany’s IFO surveys and Michigan Consumer Sentiment Index report will be released later in the day. 

Traders will closely monitor the progress of US-Iran ceasefire talks. Iranian officials said that the latest proposal from the US partly narrowed the gap between the warring sides, but comments from the Islamic Republic’s Supreme Leader about keeping Tehran’s uranium stockpile and a dispute over tolls in the Strait of Hormuz clouded the outlook for a breakthrough. 

On Wednesday, US President Donald Trump warned that he may resume attacks soon if Iran doesn’t agree to his terms. Any signs of a prolonged conflict or escalating tensions in the Middle East could boost a safe-haven currency such as the Greenback and act as a headwind for the major pair. 

The case for the European Central Bank (ECB) rate hike in June is nearly sealed, but the central bank is likely to be noncommittal about any further move, looking to temper bets for a quick follow-up step in July, according to Reuters. The ECB decided to hold the key interest rates steady ‌in April, but it debated a hike and signalled that a move in the June policy meeting was likely given persistently high energy costs.