COMMERZBANK FX strategist says rising Middle East tensions and higher energy prices make a firm ECB signal of willingness to hike further euro-positive. He expects the ECB to hold this week but to raise rates again in September; if the US‑Iran conflict escalates, explicit ECB readiness to continue hiking after September would be decisive in limiting EUR/USD downside. Mitsubishi UFJ strategists see a very low probability of back‑to‑back ECB hikes this week and note even hawks such as Bundesbank p

COMMERZBANK FX strategist says rising Middle East tensions and higher energy prices make a firm ECB signal of willingness to hike further euro-positive. He expects the ECB to hold this week but to raise rates again in September; if the US‑Iran conflict escalates, explicit ECB readiness to continue hiking after September would be decisive in limiting EUR/USD downside. Mitsubishi UFJ strategists see a very low probability of back‑to‑back ECB hikes this week and note even hawks such as Bundesbank president Joachim Nagel favor a hold; the energy-price rebound supports a +25bp September hike call. Euro‑area rate markets are nearly fully pricing two more ECB hikes by year‑end, pushing short-term rates back toward this year’s highs, while softer US inflation has reduced the passthrough from energy to Fed hike odds, shifting yield differentials in the euro’s favor.