Euro Could Benefit if Markets Trim U.S. Rate Rise Bets, Middle East Tensions Ease -- Market Talk

1006 GMT - The euro could rise modestly against the dollar if markets trim U.S. interest rate-rise expectations and Middle East tensions ease, Commerzbank's Thu Lan Nguyen says in a note. Markets continue to expect one rate rise by the Federal Reserve this year. This looks "overly optimistic" and a reassessment of the rate outlook over the coming quarters is likely, she says. Rate-rise expectations for the European Central Bank also appear somewhat stretched, although the euro should benefit more than the dollar if U.S.-Iran tensions ease by year-end due to potentially lower energy prices supporting the eurozone economy, she says. Commerzbank expects the euro to rise to $1.17 by December and $1.19 a year later, from $1.1524 currently. (renae.dyer@wsj.com)

(END) Dow Jones Newswires

August 07, 2026 06:06 ET (10:06 GMT)