EUR/USD recovered after posting a loss of 0.25% last Friday, as hostilities between Israel and Iran began, which boosted the Greenback's appeal. Nevertheless, with both parties set to continue exchanging blows and a slightly diminished risk of turning into a regional conflict, an improvement in risk appetite underpins the shared currency.

The EUR/USD trades at 1.1572, up 0.17%, after reaching a daily low of 1.1523. The Greenback trades on the back foot. A scarce economic docket in the United States (US) revealed that manufacturing activity in the New York area plunged to its weakest reading since March's two-year low, indicating the ongoing economic slowdown.

Meanwhile, the majority of the news headlines are focused on the Israel-Iran conflict, which is set to continue despite the White House exerting pressure on Tehran to reach a deal. Iranian state TV announced that a new wave of Iranian missile attacks on Israel has begun, targeting Tel Aviv and Haifa.

Earlier, the Eurozone (EU) economic docket featured speakers from the European Central Bank (ECB), led by Vice-President Luis de Guindos and Bundesbank President Joachim Nagel. Other data showed that S&P affirmed Germany's creditworthiness at ‘AAA' rating with a stable outlook.

Market mood improved even though the Middle East conflict continued. Traders are watching the Federal Reserve's (Fed) monetary policy decision on June 18, followed by the press conference of Fed Chair Jerome Powell. Alongside this, Fed officials would update their economic projections, which would be crucial in setting the path of monetary policy and could influence the direction of the EUR/USD.

Source: Fxstreet