The EUR/USD pair trades in negative territory near 1.1780 during the early Asian session on Friday. The major pair retreats from eight-week highs as traders remain cautious ahead of the next meeting between the United States (US) and Iran, scheduled for the weekend.
US President Donald Trump stated on Thursday that he had spoken with Lebanese President Joseph Aoun and Israeli Prime Minister Benjamin Netanyahu. He further stated that Israel and Lebanon had agreed to a 10-day ceasefire, which will begin at 5 p.m. ET.
Talks between Washington and Tehran are expected to resume this weekend. Trump struck an optimistic tone for prospects that the US and Iran could clinch a permanent ceasefire ahead of its expiration next week. However, there could still be some market volatility approaching, which provides some support to the US Dollar (USD) and acts as a headwind for the major pair.
The European Central Bank (ECB) officials are leaning toward keeping interest rates unchanged at the April policy meeting. ECB President Christine Lagarde stated this week that the central bank needs to be “completely agile” on rates but stressed that it doesn’t have a bias toward raising them.
However, traders see rate hikes as inevitable, expecting two quarter-point increases this year. Financial markets now see a one-in-five chance of an ECB rate hike in the April policy meeting, but a move by June is nearly fully priced in, and a second hike in the autumn is also anticipated, according to Reuters.
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