Realized volatility in the euro versus the dollar is likely to remain low in the near term. ING’s Chris Turner suggests this environment may persist until mid-September, when global central bankers return from summer breaks. The euro is expected to trade within a tight range of $1.1515 to $1.1560.

Meanwhile, Treasury yields are rising as the dollar trades steady. Negotiations to reopen the Strait of Hormuz appear stalled, lifting oil prices. President Trump has stated he will demand war reparations from Iran following Tehran's calls for compensation regarding conflict destruction.

Markets are now pricing an increased chance that the Federal Reserve will raise interest rates in September due to higher oil prices. LSEG data shows this probability is back above 50%. Currently, the 10-year Treasury yield is up to 4.721%, while the DXY dollar index remains flat at 99.834 as investors await U.S. inflation data.