Euro Has Closed the Gap But is in No Hurry to Rise

EURUSD closed the gap formed at Monday’s open but shows limited upside as investors await US–Iran talks and the outcome of a ceasefire due to expire on 21 April 2026. Political noise in the US — notably Kevin Warsh’s congressional hearings and threats around Fed appointments — is casting a shadow over the dollar and could lift EURUSD if it pressures the greenback or revives talk of Fed rate cuts. Conversely, ECB President Christine Lagarde warned policymakers would raise rates more than expected if fiscal largesse pushed eurozone inflation above 6%, a stance that would narrow the ECB–Fed rate gap and support the euro. Overall, the piece is a cautious market commentary: EURUSD is supported by monetary policy divergence and geopolitical developments, but traders remain hesitant to push the pair significantly higher until clarity on US–Iran talks and US monetary/political developments arrives.