EUR/USD supported by ECB September hike talk as Iran peace rumours lift risk

Risk appetite improved into the North American close as unconfirmed Russian media reports pointed to a potential Iran-US deal, easing the geopolitical premium that had underpinned the dollar and crude prices in recent sessions. Simultaneously, ECB sources indicated policymakers are prepared to raise rates at the September meeting, a hawkish signal that widens the euro's rate advantage and offers direct support to EUR/USD. US Treasury yields were also in focus as traders reassessed the Fed path ahead of Wednesday's July PCE inflation release. The combination of a firmer ECB tightening narrative and reduced Middle East risk premium favours pro-cyclical currencies and undercuts safe-haven demand for the dollar, franc and yen, while lower oil would trim support for CAD and NOK. Traders should treat the Iran headlines with caution given the single-source nature of the reports; a denial would quickly reverse the move and lift crude again. EUR/USD upside hinges on ECB confirmation, with technical focus on a break of recent range highs to extend the trend.