Euro-Yen Stabilizes at 182.50 on Middle East Hopes

The euro-yen currency pair stabilized around 182.50 on Monday, rebounding slightly after two days of declines, as improved geopolitical sentiment in the Middle East bolstered the euro against major peers, including the Japanese yen.

The pair traded virtually unchanged during Asian hours, reflecting a balance between optimism over a potential swift end to the U.S.-Israel conflict with Iran and ongoing concerns about energy costs and currency interventions. According to reports citing U.S. Energy Secretary Chris Wright, the war could conclude within weeks, paving the way for normalized oil supplies and reduced pressure on global energy prices. This outlook provided a lift to the euro, which has shown resilience amid broader market recovery.

However, the eurozone's exposure to energy shocks remains a key vulnerability. Rising oil prices, fueled by the regional tensions, have strained Europe's trade balance and heightened inflationary risks. Money markets have adjusted sharply, now anticipating two 25-basis-point interest rate hikes from the European Central Bank this year, up from expectations of no changes last month. Traders are closely watching the ECB's policy meeting on March...