EUR/USD holding onto gains amid Mid-East tensions

EUR/USD is trading above 1.1150, consolidating its gains as the US and Iran continue trading threats after the killing of Iranian general Suleimani. Euro-zone figures are also on the docket.

The tensions between the US and Iran escalated over the weekend with Iran’s supreme leader Ayatollah Ali Khamenei promising ‘severe revenge’ for the US killing of Iranian general Soleimani. The nation also declared that it will no longer abide by any of the restrictions imposed by the 2015 nuclear deal.

The yield on the US 10-year Treasury note fell to a one-month low of 1.757% in Asia and is currently seen at 1.777% – down 10 basis points on the day. As a result, the US yields, therefore, are likely to remain under pressure in Europe.

The EUR is backed by a current account surplus and most Eurozone nations’ government bonds are offering a negative yield. The markets, therefore, could treat the single currency as an anti-risk asset.

On the data front, the German retail sales for November and final PMI indices for December are due for release. These data sets, however, could be overshadowed by geopolitical developments.