Euro struggles above 1.1400 as fresh US strikes on Iran support USD ahead of FOMC Minutes

The EUR/USD pair defends the 1.1400 mark during the Asian session on Wednesday, though it struggles to attract any meaningful buyers on the back of renewed US-Iran hostilities. Traders also seem hesitant and opt to wait for FOMC Minutes for more cues about the Federal Reserve's (Fed) policy path before placing fresh directional bets.

The US military launched unleashed a new wave of strikes against Iran on Tuesday following reports of attacks on three oil tankers in the Strait of Hormuz, jeopardizing the already fragile ceasefire. Traders were quick to price in the geopolitical risk premium amid concerns about a further escalation of tensions, which is seen underpinning the safe-haven US Dollar (USD) and acting as a headwind for the EUR/USD pair.

Meanwhile, the US also moved to withdraw a key concession that allowed Iran to sell oil on international markets, triggering a sharp rally in Crude Oil prices and energy-driven inflation fears. This lifts market expectations that the Fed will hike interest rates at least once by the end of this year. The outlook, in turn, triggers a fresh leg up in US Treasury bond yields, which is seen as another factor supporting the Greenback.

The USD bulls, however, refrain from placing aggressive bets as the market focus remains glued to the release of the Minutes of the June 16–17 FOMC meeting, due later during the US session. Investors will look for further insight into the Fed's monetary policy outlook, which, in turn, will play a key role in influencing the near-term USD price dynamics and providing some meaningful impetus to the EUR/USD pair.