EUR/USD hits 1.1770 as diplomatic hopes weaken dollar

EUR/USD climbed to 1.1770, its highest point since early March, extending an eight-day winning streak as investors shift toward riskier assets. The move reflects growing optimism that diplomatic channels with Iran remain open, despite no formal breakthrough. US Vice President JD Vance struck a cautiously optimistic tone, stating that meaningful progress has been made in negotiations—a sentiment enough to erode demand for the safe-haven US dollar. At the same time, uncertainty over the Federal Reserve’s next interest rate move continues to weigh on the dollar, which is trading near its lowest level since early March. Yet the rally faces constraints. The U.S. Navy has begun enforcing a blockade in the Strait of Hormuz, prompting Iran to threaten all ports in the Persian Gulf and the Gulf of Oman. These developments keep geopolitical risk elevated. Fears that the current ceasefire could collapse, reigniting conflict, are tempering aggressive bets on further euro gains. Still, the fundamental backdrop supports the euro’s momentum, fueled by diminishing dollar appeal and sustained buying interest in the single currency.