The euro rose in European trading on Friday against a basket of global currencies, maintaining gains for a second consecutive day against the US dollar and heading toward a weekly advance after the European Central Bank raised interest rates for the first time in nearly three years in an effort to combat inflationary pressures stemming from the Iran conflict.

US President Donald Trump canceled planned military strikes against Iran and signaled that a peace agreement with Tehran could be close, helping to improve risk sentiment across global markets.

The Price

• Euro exchange rate today: The euro rose around 0.1% against the dollar to $1.1587, up from an opening level of $1.1579, after touching an intraday low of $1.1557.

• The euro ended Thursday up 0.4% against the US dollar following the ECB's policy decisions and Trump's announcement suspending US military strikes against Iran.

Weekly performance

For the week, which officially concludes with Friday's settlement, the single European currency is up about 0.6% against the US dollar and is on track to record its second weekly gain in the past three weeks.

European Central Bank

As widely expected, the European Central Bank raised interest rates by 25 basis points on Thursday, taking its benchmark rate to 2.40%. The move marked the first eurozone rate increase since September 2023 and was aimed at addressing inflationary pressures linked to the Iran conflict.

The ECB acknowledged that the effects of the Iran war and the energy crisis have intensified inflationary pressures across the eurozone and revised its inflation forecasts higher for both 2026 and 2027.

The central bank also stressed that future policy decisions will depend entirely on incoming economic data, geopolitical developments, and its assessment of underlying inflation trends.

ECB President Christine Lagarde said higher energy prices could push inflation above the bank's 2% target in the coming period. She also noted that the conflict in the Middle East has begun to weigh on economic activity across the eurozone.

European interest rates

• Reports indicate that the European Central Bank is considering pausing monetary policy normalization in July if energy prices remain at current levels.

• Money markets are currently pricing a roughly 50% probability of another 25-basis-point ECB rate hike in July.

• Market pricing for a 25-basis-point rate increase in September remains above 70%.

• Investors are awaiting additional eurozone data on inflation, unemployment, and wage growth to reassess those expectations.

Developments in the Iran conflict

• President Donald Trump unexpectedly announced a halt to planned military airstrikes against targets inside Iran, saying a preliminary agreement had been approved by senior leaders in Tehran.

• Trump stated that the final points of the peace agreement had been approved in principle by all parties involved.

• Countries participating in the framework reportedly include the United States, Israel, Saudi Arabia, the United Arab Emirates, Qatar, Turkey, Pakistan, Bahrain, Kuwait, Jordan, and Egypt.

• Reports indicated that discussions regarding Iran had been elevated to the highest levels of Iranian leadership and had received preliminary approval.

• The naval blockade will remain in place until the agreement is finalized, with the time and location of the signing ceremony to be announced later.

• Iran said no final decision has been made regarding the agreement that Trump hopes to sign soon, as the relevant authorities continue reviewing its details.

• Trump maintained that the war with Iran has ended and said the agreement could be signed in Europe over the weekend in the presence of the Vice President.

The Japanese yen weakened in Asian trading on Friday against a basket of major and minor currencies, resuming losses that were briefly halted on Thursday against the US dollar. The currency moved closer once again to a six-week low and slipped back below the ¥160 threshold, a key level closely monitored by Japanese authorities as a potential trigger for intervention to support the local currency and curb excessive movements in the foreign exchange market.

The US dollar recovered part of its losses from the previous session as caution returned to financial markets after Iran confirmed that no final decision has yet been made regarding the agreement that US President Donald Trump hopes to sign in the near future.

The Price

• Japanese yen exchange rate today: The dollar rose about 0.3% against the yen to ¥160.30, up from an opening level of ¥159.87, after touching an intraday low of ¥159.86.

• The yen ended Thursday up 0.4% against the dollar, its first gain in three sessions, after earlier falling to a six-week low of ¥160.60.

• In addition to bargain buying at lower levels, the yen benefited after President Donald Trump announced a suspension of planned airstrikes against Iranian targets.

The ¥160 threshold

Japanese authorities continue to closely monitor currency market movements, particularly after the yen weakened beyond the key ¥160-per-dollar level, which is widely viewed as a threshold that could prompt renewed market intervention.

Sources told Reuters that Tokyo intervened several times in late April and early May to halt the yen's decline. At that time, the exchange rate reached ¥160.72 per dollar, its weakest level since July 2024.

Japanese officials have warned against excessive currency volatility and indicated that authorities could take decisive action against disorderly moves in the foreign exchange market.

Finance Minister Satsuki Katayama said the government is "prepared to take appropriate action" if currency markets experience excessive or speculative movements.

Japanese interest rates

• Market pricing for a quarter-point interest rate increase by the Bank of Japan at its June meeting remains above 95%.

• The Bank of Japan will meet on June 15-16 to assess the appropriate monetary policy tools for the world's fourth-largest economy.

US dollar

The US Dollar Index rose about 0.2% on Friday, recovering part of the heavy losses recorded in the previous session and reflecting renewed strength in the US currency against a basket of global peers.

The rebound comes as caution and risk aversion return to markets, particularly after Iran confirmed that final approval has not yet been granted for the peace agreement announced by President Donald Trump and that the terms remain under review by the country's senior leadership.

Developments in the Iran conflict

• President Donald Trump unexpectedly announced a halt to planned military airstrikes against targets inside Iran, saying a preliminary agreement had been approved by senior leaders in Tehran.

• Trump stated that the final points of the peace agreement had been approved in principle by all parties involved.

• Countries participating in the framework reportedly include the United States, Israel, Saudi Arabia, the United Arab Emirates, Qatar, Turkey, Pakistan, Bahrain, Kuwait, Jordan, and Egypt.

• Reports indicated that discussions regarding Iran had been elevated to the highest levels of Iranian leadership and had received preliminary approval.

• The naval blockade will remain in place until the agreement is finalized, with the time and location of the signing ceremony to be announced later.

• Iran said no final decision has been made regarding the agreement that Trump hopes to sign soon, as the relevant authorities continue reviewing its details.

• Trump maintained that the war with Iran has ended and said the agreement could be signed in Europe over the weekend in the presence of the Vice President.

Corn futures extended their losses after the US Department of Agriculture unexpectedly raised its forecast for US ending stocks in the 2025-2026 marketing year, as stronger exports were offset by weaker demand from the ethanol sector. Soybean futures also continued to retreat after supply projections came in above expectations, accompanied by another reduction in US export forecasts.

Meanwhile, hard red winter wheat futures advanced after the USDA cut its forecast for the drought-stricken wheat crop by more than expected. The crop had already been projected to post its smallest harvest in 62 years.

The USDA's monthly World Agricultural Supply and Demand Estimates report contained few major surprises for corn, soybeans, or wheat. However, the broader picture of abundant near-term supplies kept prices near the lows reached during the sharp selloff seen over the past two weeks.

The department increased its estimate for US corn ending stocks in the 2025-2026 marketing year by 3 million bushels to 2.145 billion bushels, the highest level in seven years, defying market expectations for a slight reduction. It also raised its forecast for 2026-2027 ending stocks by 3 million bushels to 1.96 billion bushels.

At the same time, the USDA increased its forecast for 2025-2026 corn exports by 25 million bushels to a record 3.325 billion bushels, but lowered corn use for ethanol production by the same amount to 5.575 billion bushels.

For soybeans, the department left US ending stocks for the 2025-2026 season unchanged at 340 million bushels, contrary to market expectations for a modest decline. It also maintained its 2026-2027 ending stocks forecast at 310 million bushels.

The USDA also cut its forecast for US soybean exports in the 2025-2026 season for a second consecutive month, reducing estimates by 20 million bushels to 1.51 billion bushels, the lowest level in 13 years, while slightly raising its outlook for soybean crushing and processing.

Globally, the department left its 2026 soybean production forecasts unchanged at 50 million metric tons for Argentina and 180 million metric tons for Brazil.

However, it raised its forecast for Brazil's corn crop by 3 million metric tons compared with its May estimate and increased Argentina's crop by 2 million metric tons to 61 million metric tons.

Jeremy McCann, director of farmer relations at Farmers Keeper, said this month's report is typically less influential than the acreage report due on June 30. He noted that changes to both old- and new-crop stock estimates were relatively minor, shifting market focus entirely to the end-of-month acreage report.

The USDA is scheduled to update its estimates for corn and soybean planted acreage in its June 30 report, which is expected to be a key driver of price movements throughout the summer.

In a separate report, the department estimated total winter wheat production for the 2026-2027 season at 1.03 billion bushels, down 18 million bushels from its May forecast and more than 27% lower than the 2025-2026 crop, making it the smallest harvest since 1965.

Analysts had expected production of around 1.041 billion bushels.

The hard red winter wheat crop, which has been hit hardest by drought conditions, was estimated at 496.9 million bushels, down 18 million bushels from May and 38% below last year's level.

By midday trading, December corn futures were down 6 cents at $4.4075 per bushel, while November soybean futures fell 7 cents to $11.3150 per bushel. In contrast, July hard red winter wheat futures rose 3.5 cents to $6.34 per bushel.

Oil prices declined on Thursday after US President Donald Trump canceled airstrikes that had been planned against Iran later in the day, citing ongoing discussions with Tehran.

During trading, US West Texas Intermediate crude fell 3.13% to $87.21 per barrel as of 1:35 p.m. Eastern Time, while Brent crude dropped 3.36% to $89.97 per barrel.

In a post on Truth Social, Trump said he had decided to cancel the planned strikes and air operations against Iran after discussions with the Islamic Republic reached the highest levels of Iranian leadership and after obtaining approvals from all relevant parties.

Earlier, Trump had said the United States would strike Iran "very hard" on Thursday evening, following a wave of airstrikes on Wednesday targeting Iranian surveillance capabilities, communications systems, and air defense sites.

The US president also threatened to take control of Kharg Island, Iran's largest oil export terminal, asserting that the United States would establish "complete control" over Iranian oil and gas markets, similar to what it had done in Venezuela.

Recent days have witnessed escalating military exchanges between Washington and Tehran after US forces launched attacks on targets inside Iran, prompting Tehran to respond with missile strikes against several Gulf countries.

Iranian state media reported that Tehran targeted US military facilities in Kuwait and Bahrain, including Ali Al Salem Air Base, Ahmad Al Jaber Air Base, and Sheikh Isa Air Base. Bahrain, meanwhile, said its air defenses intercepted and destroyed the Iranian threats.

Iranian media also reported that Iran carried out missile and drone attacks against US vessels operating in the Strait of Hormuz, while Kuwait closed its airspace and intercepted projectiles on Thursday.

Despite the latest escalation, energy consultancy Rystad Energy said the oil market is now better equipped to absorb disruptions than during previous crises, citing higher US oil exports, weaker Chinese demand, and the availability of alternative export routes that reduce reliance on the Strait of Hormuz.

However, the firm also warned that the chances of a rapid diplomatic breakthrough have diminished, leaving oil prices vulnerable to sharp swings as uncertainty over the future of the conflict persists.