24.03.202609:30:50UTC+00Euro Dips Below $1.16 on Weak PMI, Middle East Tensions

The euro fell below $1.16 as investors reacted to weaker-than-expected PMI data and persistent tensions in the Middle East, heightening fears of an energy-driven economic shock. The latest survey showed Eurozone business activity expanding at its slowest pace in ten months in March, while costs rose at their fastest rate in more than three years, driven by soaring energy prices and supply chain disruptions linked to the war. Business confidence slumped, recording its steepest drop since Russia’s 2022 invasion of Ukraine. Adding to the uncertainty, US President Trump postponed planned strikes on Iran for five days, citing "positive talks"—a claim Tehran dismissed as "psychological warfare", even as reports indicated that indirect negotiations might be underway. With energy prices surging, markets have intensified their bets on further ECB rate hikes, despite the central bank’s recent decision to keep rates on hold while raising its inflation forecasts and lowering its growth outlook amid mounting regional risks.