EUR/USD Steady as Spain CPI Meets Expectations; US-Iran Conflict Dominates

Spain's final February CPI confirmed at +2.3% year-over-year, matching preliminary estimates and the prior reading, while HICP held at +2.5% y/y as expected. Core CPI edged higher to +2.7% from the previous +2.6%, suggesting underlying inflationary pressures persist in the eurozone's fourth-largest economy. However, the data has had minimal impact on EUR/USD price action, as market attention remains firmly fixed on the escalating US-Iran conflict and disruptions in the Strait of Hormuz, which continue to keep oil prices elevated and drive risk sentiment. The geopolitical premium is currently the dominant force across forex markets. Notably, markets are now pricing in two ECB rate hikes by year-end, a hawkish shift that could provide underlying support for the euro in the medium term. Traders should monitor oil price developments closely, as prolonged supply disruptions through the Strait of Hormuz could further stoke inflation across the eurozone, potentially reinforcing the case for additional ECB tightening and influencing EUR/USD directional bias.