The euro rose in the European market on Wednesday against a basket of global currencies, extending its gains for the second consecutive day against the US dollar, due to slower purchases of the US currency as a safe haven and improving risk sentiment, amid growing hopes of reaching a peace agreement between the United States and Iran.

Amid elevated pricing of the probability of European interest rate hikes this year, traders are awaiting the release of more economic data in the eurozone in order to reassess the chances of the European Central Bank normalizing monetary policy in June.

Price Overview

The euro exchange rate today: The euro rose against the dollar by about 0.4% to $1.1736, from the opening level of $1.1692, and recorded a low of $1.1689.

The euro ended Tuesday’s trading up by less than 0.1% against the dollar, marking its first gain in the past three days, as military tensions between the United States and Iran in the Strait of Hormuz eased.

The US dollar

The dollar index fell on Wednesday by 0.5%, heading toward its first loss in the past four sessions, reflecting the decline of the US currency against a basket of major and secondary currencies.

Risk sentiment improved in global markets, with slower purchases of the US dollar as the best alternative investment, due to growing hopes of reaching a peace agreement between the United States and Iran.

In a notable development, US President Donald Trump announced that the United States and Iran had reached an agreement to suspend the movement of “Project Freedom” ships through the Strait of Hormuz, as long as the blockade remains fully in place, indicating that this decision comes amid significant progress toward reaching a comprehensive agreement between the two sides.

Trump explained that the suspension came in response to a request from Pakistan and several other countries, confirming that it is a temporary measure aimed at allowing time to complete negotiations and sign the anticipated agreement.

In the same context, US Secretary of State Marco Rubio stated that the “Salty Rage” operation had ended and that the priority is now focused on reopening the Strait of Hormuz.

Global oil prices

Global oil prices fell on Wednesday by more than 2.5%, extending losses for the second consecutive day and moving away from their highest levels in several weeks, amid easing fears over disruptions to energy supplies from the Arabian Gulf region and growing chances of reopening the Strait of Hormuz to oil tankers.

There is no doubt that declining global oil prices reduce concerns about accelerating inflation, which supports global central banks maintaining monetary policy tools unchanged for a long period this year.

European interest rates

With the decline in global oil prices, money market pricing for the probability of the European Central Bank raising European interest rates by 25 basis points in June fell from 55% to 45%.

In order to reprice the above probabilities, investors are awaiting the release of more economic data in the eurozone on inflation, unemployment, and wage levels.

The Australian dollar rose in the Asian market on Wednesday against a basket of global currencies, extending its gains for the second consecutive day against its US counterpart and recording its highest level in four years, amid positive sentiment dominating global markets and slowing purchases of the US currency as a safe haven, especially after Donald Trump announced significant progress in peace negotiations with Iran.

Following a hawkish meeting, Reserve Bank of Australia Governor Michele Bullock confirmed that the bank is acting proactively to control inflation before it gets out of control. Those comments strengthened the chances of an Australian interest rate hike in June.

Price Overview

Australian dollar exchange rate today: The Australian dollar rose against its US counterpart by about 0.9% to 0.7243, the highest level since June 2022, from the opening level of 0.7181, and recorded a low of 0.7180.

The Australian dollar ended Tuesday’s trading up by more than 0.2% against the US dollar, marking its third gain over the past four days, following a hawkish monetary policy meeting by the Reserve Bank of Australia.

The US dollar

The dollar index fell on Wednesday by more than 0.25%, heading toward its first loss in the past four sessions, reflecting the decline of the US currency against a basket of major and secondary currencies.

Risk sentiment improved in global markets, with slower purchases of the US dollar as the best alternative investment, due to growing hopes of reaching a peace agreement between the United States and Iran.

In a notable development, US President Donald Trump announced that the United States and Iran had reached an agreement to suspend the movement of “Project Freedom” ships through the Strait of Hormuz, as long as the blockade remains fully in place, indicating that this decision comes amid significant progress toward reaching a comprehensive agreement between the two sides.

Trump explained that the suspension came in response to a request from Pakistan and several other countries, confirming that it is a temporary measure aimed at allowing time to complete negotiations and sign the anticipated agreement.

In the same context, US Secretary of State Marco Rubio stated that the “Salty Rage” operation had ended and that the priority is now focused on reopening the Strait of Hormuz.

Australian interest rates

The Reserve Bank of Australia raised the benchmark interest rate yesterday, Tuesday, by 25 basis points to 4.35%, the highest level since December 2024, marking the third consecutive interest rate increase.

Eight board members voted in favor of the increase, while one member voted against it, reflecting broad consensus within the bank on continuing monetary policy normalization.

Reserve Bank of Australia Governor Michele Bullock said that the bank is acting proactively to control inflation before it gets out of control.

Bullock explained that the decision to raise interest rates aims to contain growing inflationary pressures, especially those resulting from geopolitical tensions and rising energy prices.

Pricing for the probability of the Reserve Bank of Australia raising interest rates by 25 basis points in June is currently stable around 75%.

In order to reprice those probabilities, investors are awaiting the release of more data on inflation, unemployment, and wage levels in Australia.

Ongoing unrest in the Gulf has led to a sharp rise in global gas prices, bringing renewed attention to Turkmenistan’s vast gas reserves, amid fresh calls to revive a long-discussed trans-Caspian pipeline project that could help ease Europe’s energy crisis.

During an energy conference on April 24, Turkish Energy Minister Alparslan Bayraktar called for urgent international talks to revive the long-awaited pipeline project aimed at transporting Turkmen gas across the Caspian Sea to Turkey and then to Europe.

He said: “We believe it is extremely necessary to implement a pipeline that transports Turkmen natural gas from the Caspian Sea to Turkey, and from Turkey to Europe.”

Supply crisis pressures Turkey and Europe

Ankara is seeking to strengthen its gas supply sources after Iranian supplies were halted in March due to the conflict in the Gulf. Iran had provided about 15% of Turkey’s gas needs, while Ankara imports more than 80% of its consumption, with gas costs rising by about 70% this year.

A previous attempt to import Turkmen gas through a swap agreement with Iran failed last year after just three months, following tighter US sanctions on Tehran. Delivered volumes did not exceed 1.3 billion cubic meters by the end of 2025, despite plans to raise them to 3 billion this year.

A long-term strategic solution

Building a direct pipeline to transport gas from Turkmenistan across the Caspian Sea to Azerbaijan, and then to Turkey and Europe, is seen as a strategic option to ensure long-term supplies.

Although the project has been discussed since the late 1990s, it has not been implemented due to Europe and Turkey previously preferring cheaper gas imports from Russia and Azerbaijan, in addition to Baku’s reservations about allowing Turkmen gas to pass through its territory, as well as the absence of clear commitments from Turkmenistan regarding supply volumes.

A new window of opportunity for Europe

Today, with rising prices due to the Gulf conflict, which has exposed the fragility of the Strait of Hormuz as a vital energy corridor, Europe faces a dilemma in securing gas supplies.

The European Union plans to end its remaining imports of Russian gas by November 2027, while Azerbaijan has not yet succeeded in increasing production sufficiently to compensate for these supplies.

In this context, Turkmenistan may find an opportunity to strengthen its role as a major gas supplier to Europe.

Financing and geopolitical challenges

However, the project faces significant obstacles, most notably its estimated cost of around $12 billion, raising questions about investors’ willingness to bear the risks amid uncertainty surrounding Iran, the Gulf, and the Caspian region.

The proposed pipeline—spanning about 300 kilometers—would lie between the coasts of Iran and Russia, two countries that may not welcome a project that reduces their influence in the European energy market.

Turkmenistan’s focus on China

Turkmenistan’s level of commitment to the project also remains uncertain, as it has shown no clear interest until 2023, with no concrete steps taken so far.

In contrast, Ashgabat is focusing on strengthening its ties with China, marking 20 years of energy cooperation during which about 460 billion cubic meters of gas have been exported since 2009.

In March, Turkmen leader Gurbanguly Berdimuhamedov visited Beijing, where he agreed with President Xi Jinping to expand cooperation in the gas sector.

China National Petroleum Corporation (CNPC) has also secured a contract to develop the fourth phase of the giant “Galkynysh” field, expected to produce 10 billion cubic meters annually, all of which will be directed to China.

Amid geopolitical shifts and rising energy prices, the trans-Caspian pipeline project may represent a strategic opportunity for Europe to reduce its reliance on traditional sources, but it remains dependent on political balances, the availability of financing, and Turkmenistan’s willingness to shift its focus westward.

Copper prices on the London market stabilized on Tuesday after earlier declining to their lowest levels in three weeks, under pressure from the strength of the US dollar and concerns about a slowdown in the global economy.

As of 07:31 GMT, the price of three-month copper contracts on the London Metal Exchange held steady at $12,996 per metric ton, after earlier in the session recording its lowest level since April 13.

Trading remained limited as the Shanghai Futures Exchange was closed for the Labor Day holiday, with trading set to resume on Wednesday.

On the geopolitical front, the United States and Iran launched new attacks in the Gulf on Monday as part of their rivalry over control of the Strait of Hormuz through reciprocal naval blockades, increasing uncertainty in global markets.