Euro posts modest gains above 1.1350 as traders await US CPI inflation release

The EUR/USD pair posts modest gains near 1.1385 during the Asian trading hours on Tuesday. Nonetheless, the potential upside for the major pair might be limited amid renewed US military strikes against Iran. Traders will take more cues from the US June Consumer Price Index (CPI) inflation data, which will be released later on Tuesday. 

US President Donald Trump on Monday announced that the US is reinstating its blockade of Iranian maritime traffic and would impose a toll of 20% on all cargo being shipped through the Strait of Hormuz. 

The US military has resumed strikes on Iran, including on the port city of Bandar Abbas and on the Qeshm and Kish islands. In response, Iran has struck two UAE tankers, the Mombasa and Al Bahiyah. Rising tensions in the Middle East could boost a safe-haven currency such as the Greenback and create a headwind for the major pair in the near term. 

The US CPI inflation report will be published on Tuesday, which could offer some hints about the US Federal Reserve’s (Fed) next move. A softer inflation outcome would delay the case for the US interest rate hikes and undermine the US Dollar (USD) against the Euro (EUR).