The EUR/USD is trading practically flat on Wednesday, just below a multi-year high near 1.1640, last seen in November 2021, consolidating gains after a nearly 1.40% rally in the previous two days.

A moderate appetite for risk continues to drive markets, despite the fragility of the ceasefire between Israel and Iran, and is keeping the safe-haven US Dollar (USD) on its back foot.

Oil prices have ticked up from Tuesday's lows butt remain well below the highs seen last week.

Iran's Oil and Natural Gas facilities seem to have been little affected by the bombings, and Oil traffic through the strategic Strait of Hormuz does not seem under threat, at least for now. The relatively low Crude prices are an additional support to the Euro (EUR) as they ease inflationary pressures on the Eurozone economy.

In the US, on Tuesday, the Federal Reserve (Fed) Chairman Jerome Powell reiterated that the central bank is in no rush to cut interest rates at the Semiannual Monetary Policy Report to Congress. Pressure from US President Donald Trump and the growing dissension among Fed officials does not seem to have scratched Powell's hawkish stance.

The market, however, keeps betting on a rate cut in September, especially after the downbeat Consumer Confidence reading released on Tuesday. Increasing concerns about employment are limiting US consumers' purchasing decisions and increasing pressure on the central bank to adopt a less restrictive monetary policy.

Source: FXStreet