The euro falls to $1.14 after the end of the ceasefire between the US and Iran

The euro has weakened to $1.1408 after Donald Trump declared the ceasefire with Iran over, which caused Brent crude to spike by 6%.

The euro faced another setback on Wednesday, falling below $1.14, after the President of the United States, Donald Trump, announced at the NATO summit in Ankara that the ceasefire with Iran has concluded. The news triggered a sharp rise in oil prices, which in turn boosted the dollar as a safe haven currency.

Euro exchange rate and ECB reaction

At around 15:00 GMT, the euro was trading at $1.1408, down from $1.1433 at the previous close. The European Central Bank (ECB) set the reference exchange rate at $1.1404. The single currency moved within a narrow band, between $1.1395 and $1.1431, reflecting market uncertainty.

The Governor of the Bank of Spain, José Luis Escrivá, indicated that the ECB will keep all options open in its interest rate decisions, without committing to a specific direction. Investors are now awaiting the minutes from the last Federal Reserve (Fed) meeting to gauge the next steps in monetary policy.

Rising oil prices and safe haven dollar

Trump's statements caused the price of Brent crude oil, the European benchmark, to rise by more than 6% to exceed $78.5. Geopolitical tensions strengthen the dollar, considered a safe asset in times of uncertainty, which puts downward pressure on the euro.

For Spanish companies that import or export, this exchange rate volatility has a direct impact. A falling euro makes purchases in dollars (such as oil) more expensive but cheapens exports to the United States. Companies with dollar-denominated debt also see their financial costs increase.

Analysts warn that the situation in the Middle East remains unpredictable, and any escalation could lead to new fluctuations in the currency and commodity markets. The euro could remain under pressure if the dollar continues to strengthen as a safe haven.

For now, the single currency remains within a tight range, awaiting further signals regarding Fed monetary policy and the evolution of the conflict. Investors would do well to closely monitor upcoming statements from the White House and the ECB.