EUR/USD: Geopolitics and ECB path – DBS

FXStreetMar 16, 2026 9:32 AM

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DBS Group economist Philip Wee highlights that EUR/USD fell 4% to 1.1415 in early March as Iran-related tensions boosted safe-haven Dollar demand. Markets price two ECB hikes in June and September, and unless the ECB pushes back, EUR/USD is expected to find support near 1.1390. The ECB is seen monitoring geopolitics calmly while watching inflation expectations.

Euro pressured but key support eyed

"EUR/USD was pressured during the first half of March, retreating 4% to 1.1415. This correction is primarily due to the geopolitical premium driven by the ongoing conflict in Iran, which prompted a flight to safety into USD. "

"EUR’s trajectory this week hinges on the European Central Bank (ECB) meeting on March 19. Currently, the market is pricing in two 25-bps rate hikes for this year, specifically in June and September."

"Unless the ECB explicitly pushes back against this hawkish pricing, we expect EUR/USD to find support near the pivotal low of 1.1390 on August 1."

"ECB President Christine Lagarde asserted that the governing council will do everything necessary to prevent a repeat of the 2022-23 inflation spiral."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Disclaimer: The information provided on this website is for educational and informational purposes only and should not be considered financial or investment advice.

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