EUR/USD Steady as Eurozone CPI Holds at 1.7%; US-Iran Tensions Weigh

EUR/USD is trading in a narrow range during the European session as markets digest the Eurozone Flash CPI release for March. Headline CPI came in at 1.7% year-over-year, matching both expectations and the prior reading, while Core CPI held steady at 2.2% year-over-year as anticipated. The in-line inflation data provides little impetus for the European Central Bank to shift its current monetary policy stance, with policymakers instead focused on assessing the potential economic fallout from the escalating US-Iran geopolitical conflict and its implications for growth and inflation dynamics. The lack of surprise in the data leaves EUR/USD largely directionless in the near term, with traders awaiting fresh catalysts. Geopolitical risk premiums continue to provide a backdrop of uncertainty, potentially supporting safe-haven flows into the US dollar and capping euro upside. Market participants should monitor developments in the US-Iran situation closely, as any escalation could trigger heightened volatility across major pairs and shift risk sentiment decisively, impacting both energy prices and broader currency markets.