The euro rose in European trading on Friday against a basket of global currencies, in an attempt to recover after three consecutive days of losses against the US dollar, benefiting from a slowdown in the US currency after Donald Trump announced a new delay in targeting Iranian energy facilities, which renewed hopes of reaching a ceasefire agreement in the Middle East.

Following more hawkish comments from the President of the European Central Bank this week, expectations for at least one interest rate hike this year have increased. To reassess those expectations, markets are awaiting further data on developments in the eurozone economy.

Price Overview

Euro exchange rate today: the euro rose 0.15% against the dollar to $1.1542, up from the session opening level of $1.1526, after hitting a low of $1.1524.

The euro ended Thursday’s session down 0.3% against the dollar, marking its third consecutive daily loss, after Iran denied entering negotiations with the United States to end the war in the Middle East.

US dollar

The dollar index fell 0.1% on Friday, heading toward its first loss in the past four sessions, reflecting a slowdown in the US currency against a basket of global currencies.

This comes as traders assess the likelihood of a halt in the war in the Middle East, amid intensified diplomatic efforts aimed at containing the escalation, with cautious anticipation of any signals that could pave the way for a de-escalation agreement or ceasefire.

Iran war developments

US President Donald Trump announced an extension of the delay in strikes on Iranian energy facilities for an additional 10 days, through April 6, noting that negotiations to end the war are progressing “very well.”

US Special Envoy Steve Witkoff confirmed that a 15-point peace proposal had been presented to Tehran via Pakistan, which is acting as a mediator alongside Egypt and Turkey.

The proposal includes a ceasefire and sanctions relief in exchange for Iran abandoning its nuclear program and reopening the Strait of Hormuz.

Iranian sources described the US proposal as “unfair and one-sided,” while state media expressed doubts about Washington’s seriousness, stressing that attacks will not stop without real guarantees.

The Wall Street Journal reported on Thursday that the Pentagon is also considering sending up to 10,000 additional ground troops to the Middle East.

Global oil prices

Global oil prices rose slightly on Friday, extending gains for the third consecutive day, as markets await further evidence of engagement between the United States and Iran in negotiations to de-escalate military tensions and reopen the Strait of Hormuz.

Carol Kong, a currency strategist at Commonwealth Bank of Australia, said the conflict does not appear likely to end soon, adding that the US dollar remains the strongest currency as long as the conflict continues.

Kong added that if expectations of a prolonged conflict prove correct, oil prices are likely to continue rising, which would further strengthen the dollar at the expense of net energy importers such as the Japanese yen and the euro.

European interest rates

ECB President Christine Lagarde said on Wednesday that the bank is ready to raise interest rates even if the expected rise in inflation is temporary.

Following those comments, money markets increased pricing for a 25-basis-point rate hike by the European Central Bank at the April meeting from 25% to 35%.

Sources told Reuters that the European Central Bank is likely to begin discussing interest rate hikes next month.

To reassess these expectations, investors are awaiting further economic data from the eurozone on inflation, unemployment, and wage levels.

The Japanese yen rose in Asian trading on Friday against a basket of major and minor currencies, in an attempt to recover from a one-week low against the US dollar, benefiting from a slowdown in the US currency after Donald Trump announced a new delay in targeting Iranian energy facilities, which renewed hopes of reaching a ceasefire agreement in the Middle East.

As inflationary pressures on policymakers at the Bank of Japan ease, expectations for a Japanese interest rate hike in April have declined. To reassess those expectations, investors are awaiting further data on developments in the world’s fourth-largest economy.

Price Overview

Japanese yen exchange rate today: the US dollar fell 0.2% against the yen to ¥159.46, down from the session opening level of ¥159.78, after reaching a high of ¥159.79.

The yen ended Thursday’s session down 0.2% against the dollar, marking its third consecutive daily loss, and hitting a one-week low of ¥159.85, due to fading hopes for a ceasefire in the Middle East.

US dollar

The dollar index fell 0.1% on Friday, heading toward its first loss in the past four sessions, reflecting a slowdown in the US currency against a basket of global currencies.

This comes as traders assess the likelihood of a halt in the war in the Middle East, amid intensified diplomatic efforts aimed at containing the escalation, with cautious anticipation of any signals that could pave the way for a de-escalation agreement or ceasefire.

Iran war developments

US President Donald Trump announced an extension of the delay in strikes on Iranian energy facilities for an additional 10 days, through April 6, noting that negotiations to end the war are progressing “very well.”

US Special Envoy Steve Witkoff confirmed that a 15-point peace proposal had been presented to Tehran via Pakistan, which is acting as a mediator alongside Egypt and Turkey.

The proposal includes a ceasefire and sanctions relief in exchange for Iran abandoning its nuclear program and reopening the Strait of Hormuz.

Iranian sources described the US proposal as “unfair and one-sided,” while state media expressed doubts about Washington’s seriousness, stressing that attacks will not stop without real guarantees.

The Wall Street Journal reported on Thursday that the Pentagon is also considering sending up to 10,000 additional ground troops to the Middle East.

Japanese interest rates

Data released this week showed a slowdown in core inflation in Japan during February, in the latest sign of easing inflationary pressures on policymakers at the Bank of Japan.

Following the data, markets reduced pricing for the probability of a quarter-point rate hike by the Bank of Japan at the April meeting from 30% to 15%.

To reassess these expectations, investors are awaiting further data on inflation, unemployment, and wages in Japan.

Oil prices rose during Thursday’s trading, recovering losses from the previous session, as investors remained concerned about a prolonged conflict in the Middle East and continued supply disruptions through the Strait of Hormuz.

Iran’s foreign minister said the country is reviewing a US proposal to end the war but does not intend to engage in direct talks, while US President Donald Trump responded with a sharp escalation in rhetoric, urging Tehran to be serious about reaching an agreement and warning that he could decide at any time to abandon negotiations.

US President Donald Trump also announced on Thursday that he would extend the pause on attacks against Iranian oil facilities by an additional 10 days, through April 6, at the request of the Iranian government.

In trading, Brent crude futures for May delivery rose 5.7%, or $5.79, to settle at $108.01 per barrel.

US Nymex crude futures for May delivery also rose 4.61%, or $4.16, to close at $94.48 per barrel.

The war in the Middle East has caused severe disruptions to global oil and gas supply chains, with damage and shutdowns affecting key facilities such as liquefied natural gas plants, refineries, and fuel storage sites. This has pushed estimated repair costs to around $25 billion so far, according to Rystad Energy, with expectations of further increases.

Estimates suggest that the largest share of these costs will be directed toward engineering and construction work, followed by spending on equipment and materials.

Qatar bears the brunt of the damage

Ras Laffan Industrial City has been the hardest hit, with the destruction of LNG trains S4 and S6 forcing a declaration of force majeure and reducing production capacity by 17%, equivalent to 12.8 million tons per year.

Despite the scale of required investment, full recovery could take up to five years due to limited availability of large gas turbines needed for operations, which are produced by only three global companies and already face multi-year backlogs driven by demand from data centers and the energy transition.

Structural constraints hinder recovery

Recovery of the Gulf’s energy sector is not expected to depend solely on financing but also on structural constraints, as some facilities can be repaired within months while others may remain offline for years.

Two cases stand out as particularly concerning:

South Pars field in Iran

Ras Laffan facility in Qatar

In Iran, sanctions further complicate the situation, forcing reliance on domestic and Chinese companies, which could slow repair efforts and increase costs.

Bahrain and the impact of timing

In Bahrain, the Sitra refinery operated by Bapco sustained significant damage after being targeted twice, affecting distillation units and storage tanks.

The issue is compounded by the timing of the attack, as it came shortly after the completion of a $7 billion upgrade project, disrupting newly added capacity and delaying expected returns.

Varying levels of damage across the region

Other countries, including the United Arab Emirates, Kuwait, Iraq, and Saudi Arabia, experienced less severe disruptions, but the speed of recovery depends heavily on the strength of local engineering and contracting capabilities.

Saudi Aramco provides a notable example, having resumed operations quickly at the Ras Tanura facility thanks to pre-established maintenance teams.

Priorities for the next phase

Companies are expected to focus in the coming phase on:

Restarting existing fields rather than developing new projects

Accelerating inspection, engineering, and commissioning work

Increasing demand for contractors and equipment suppliers

Amid ongoing sanctions, local and Asian firms are likely to secure the largest share of reconstruction work in Iran.

The pace of recovery remains dependent on execution capacity and equipment availability, as well as developments in the war itself, which could delay a return to pre-conflict production levels for an extended period.