Euro Edges Higher Above 1.1650 on Hawkish ECB Stance

EUR/USD edged higher during Thursday's European morning session, currently trading near 1.16573. The pair had earlier risen to around 1.1655 in the Asian session, with the European Central Bank's continued hawkish tone providing key support for the euro.

**ECB's Policy Stance Supports the Pair**

Recent remarks from ECB officials have maintained a hawkish bias, contrasting with market expectations that the Federal Reserve is poised to begin rate cuts. The interest rate differential factor is lending upside momentum to EUR/USD. However, diverging views among ECB officials have emerged, capping the euro's upside potential and keeping the pair in a short-term range-bound pattern.

**Market Focus Shifts to US Jobs Data**

Traders are closely watching Thursday's US initial jobless claims figures, which will offer fresh clues on the state of the US labor market. A softer reading could reinforce expectations of Fed monetary easing, putting pressure on the US dollar and indirectly influencing EUR/USD's near-term trajectory.

**Geopolitical Uncertainty Persists**

On the macro front, Russia-Ukraine aerial confrontations have entered a new phase with intensified strikes on infrastructure, while demining operations in the Strait of Hormuz have also sparked controversy. Disagreements between the US and its allies over security assessments add to persistent geopolitical uncertainties, which could trigger risk-off sentiment at any time and pose potential disruptions to risk-sensitive currencies like the euro.