The euro is gaining strongly against the US dollar as risk sentiment recovers

The euro (EUR) rose 0.36% to nearly 1.1410 against the US dollar (USD) during Monday’s European trading session. The major currency pair is trading robust as a revival in risk-on market sentiment has reduced the appeal of the US dollar as a unthreatening haven.

In European trading, S&P 500 futures are trading almost 1% higher at almost 7,485, reflecting risk-on market sentiment. The US Dollar Index (DXY), which measures the dollar’s value against six major currencies, is 0.25% lower at near 101.20.

Today’s US dollar price

The table below shows the current percentage change of the United States Dollar (USD) against the major listed currencies. The US dollar was the weakest against the Swiss franc.

Fed&#8217;s interest rate decision

	USD	EUR	GBP	JPY	BOOR	AUD	NZD	CHF
USD		-0.40%	-0.25%	-0.20%	0.01%	-0.41%	-0.30%	-0.48%
EUR	0.40%		0.11%	0.19%	0.39%	-0.02%	0.11%	-0.10%
GBP	0.25%	-0.11%		0.07%	0.28%	-0.14%	-0.04%	-0.21%
JPY	0.20%	-0.19%	-0.07%		0.17%	-0.23%	-0.13%	-0.29%
BOOR	-0.01%	-0.39%	-0.28%	-0.17%		-0.40%	-0.30%	-0.48%
AUD	0.41%	0.02%	0.14%	0.23%	0.40%		0.13%	-0.09%
NZD	0.30%	-0.11%	0.04%	0.13%	0.30%	-0.13%		-0.21%
CHF	0.48%	0.10%	0.21%	0.29%	0.48%	0.09%	0.21%

The heat map shows the percentage changes of the major currencies relative to each other. The base currency is selected from the left column and the quote currency from the top row. For example, if you select the US dollar from the left column and move along the horizontal line to the Japanese yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

The risk appetite of financial markets has improved following the cessation of military aggression between the United States (US) and Iran. Over the weekend, a U.S. military spokesman said that attacks on Iran had been suspended because the list of targets had been exhausted.

US Ambassador to the United Nations (UN) Mike Waltz said that while the armed forces remain locked and loaded, President Donald Trump wants to give negotiations some space. This was reported by the Guardian.

On the domestic market, investors are waiting for Wednesday’s announcement of monetary policy by the Federal Reserve (Fed). The Fed is expected to leave interest rates unchanged in the 3.50%-3.75% range. The impact of Fed Chairman Kevin Warsh’s press conference is expected to be negligible, as he explained at a previous press conference that “so-called forward quotes are not well suited to this current policy moment.”

In the euro zone, investors are waiting for preliminary data on the Harmonized Index of Consumer Prices (HICP) for July, which will be published on Friday. Inflation data will have a significant impact on the European Central Bank’s (ECB) interest rate expectations, given that most policymakers have warned of the risk of rising inflation.

On Thursday, ECB President Christine Lagarde told a press conference: “The risks to inflation have increased.” Lagarde added: “The energy shock is likely to keep inflation well above target until the first half of 2027.”

Economic indicator

Fed’s interest rate decision

The Federal Reserve (The Fed) deliberates on monetary policy and decides on interest rates at eight previously scheduled meetings per year. It has two tasks: to keep inflation at 2% and to maintain full employment. Its main tool for achieving this goal is setting interest rates – both those at which it lends to banks and those at which banks lend to each other. If it decides to enhance interest rates, the US dollar (USD) will strengthen as it attracts a greater inflow of foreign capital. If it cuts interest rates, it will typically weaken the dollar as capital flows to countries offering higher yields. If rates remain unchanged, attention will focus on the tone of the Federal Open Market Committee (FOMC) announcement and whether it will be hawkish (expecting higher interest rates in the future) or dovish (expecting lower interest rates in the future).