The euro traded around $1.138, near its weakest level in two months, as the dollar benefited from reduced optimism about progress in US-Iran talks and expectations of further Federal Reserve rate hikes this year. Iran said it would not ease its conditions for reopening the Strait of Hormuz after President Trump rejected its proposal. Trump told Axios that Iran had "overplayed its hand" and said he expected negotiations to resume this week. Hawkish comments from Fed officials, together with data showing robust growth and a resilient labor market, have strengthened expectations for tighter US monetary policy. In Europe, the conflict and recent energy-price developments have raised concerns about renewed inflationary pressure. Money markets are pricing roughly 100 basis points of interest-rate hikes by the end of 2027.