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Sign InThe EUR/USD pair dropped to 1.1598 on Wednesday, marking its lowest level in six weeks. According to reports, the US dollar is gaining significant support from the escalating conflict between the United States and Iran, which is heightening global inflationary risks. This geopolitical tension has driven increased demand for the greenback as a primary safe-haven asset.
This decline comes amid diverging economic data, with Spain's Harmonized Index of Consumer Prices (HICP) rising 3.5% year-on-year per market data released on May 14, 2026. Meanwhile, US Retail Sales showed a 0.5% monthly increase, reinforcing expectations of US economic resilience compared to the Eurozone, which continues to grapple with persistent inflationary pressures.
Technically, the EUR/USD remained near its recent lows as of the close on May 20, 2026, with traders closely monitoring for further escalations in the Middle East. Looking ahead, markets are focused on upcoming catalysts including a speech by ECB President Christine Lagarde and various Fed official commentaries to gauge interest rate trajectories amid these complex geopolitical conditions.