EUR/USD trades almost flat after climbing past the 1.1500 figure, following the Federal Reserve's (Fed) decision to hold rates unchanged, amid increasing tensions in the Middle East. This, along with comments from US President Donald Trump, boosted the Dollar, capping the Euro's (EUR) advance. At the time of writing, the pair trades at 1.1476, virtually unchanged.

Recently, the Fed kept rates at the 4.25%–4.50% range, reaffirming that the economy is expanding solidly, with strong labor market conditions. The US central bank reiterated its commitment to monitoring risks associated with both sides of its dual mandate and confirmed plans to further reduce its holdings of Treasury securities.

Additionally, Fed officials updated their economic projections. The Gross Domestic Product (GDP) was downwardly revised, the Unemployment Rate was barely affected, and inflation is expected to be slightly higher.
Regarding monetary policy, policymakers see two interest rate cuts toward the end of the year.

Aside from this, US President Donald Trump said that if Iran wants to come to the White House, he said, "I may do that."

At the same time, Fed Chair Jerome Powell stood to his mildly neutral stance, reaffirming that monetary policy is "well positioned to respond" to external shocks like tariffs or geopolitical risks.

Earlier, the Eurozone (EU) revealed that inflation remains within the European Central Bank (ECB) target, according to May data. Meanwhile, some ECB speakers, led by Mario Centeno and Fabio Panetta, stated that the weakness of the EU economy is a cause for greater concern within the ECB, and over time it does not appear compatible with the 2% inflation target.

This could pave the way for additional cuts by the ECB, although most officials are favoring a pause in the central bank's easing cycle.

Source: Fxstreet