Dollar Stays Strong as Iran Crisis Adds Fresh Pressure on EURUSD $EURUSD remains under pressure as markets increasingly believe the Iran-driven inflation + slowdown shock will hurt Europe more than the U.S. The inflation side of the shock is already visible. Now Europe’s weak PMI data suggests the growth slowdown is arriving too—creating a dangerous stagflation mix that could limit how aggressively the ECB can stay hawkish. Meanwhile, the real FX story since mid-May has been a hawkish Fed repricing. Markets are now pricing roughly 20bps of Fed tightening by December. Chicago Fed’s Goolsbee warned: “We are facing a fairly serious inflation problem.” All eyes now turn to Christopher Waller’s speech later today. If he even hints at further tightening, the $DXY could push higher from the 99.00–99.50 support zone. The U.S. labor market remains stable, meaning the Fed may now focus more aggressively on inflation. Watch U.S. Michigan consumer sentiment too—especially inflation expectations. Any upside surprise strengthens the dollar case. Why $EUR looks vulnerable: Europe initially recovered because traders expected the ECB to fight inflation aggressively. But weak economic data is changing that narrative. This week’s PMI reports from Germany, France, and the Eurozone point to weaker Q2 growth, raising doubts about how long the ECB can maintain its hawkish stance. Markets once priced 85bps of ECB hikes this year. Now that’s down to 65bps. ING expects just one final hike in June. At the same time, U.S.–Europe real yield spreads have shifted roughly 30bps against the euro in just two weeks. That matters. Technical levels: If $EURUSD breaks below 1.1575 → 1.1500 becomes the next likely target. Even if Middle East diplomacy improves, rebound rallies may struggle near 1.1660–1.1690 as energy shock effects linger. $EURCHF is also vulnerable. If ECB expectations weaken further, EUR weakness vs CHF could accelerate below 0.9100—though SNB likely defends the 0.90 zone aggressively. #USIranNukeDeadlock