The euro was little changed just above $1.16 as investors digested the far-right AfD’s victory in Saxony-Anhalt and looked ahead to the European Central Bank’s policy meeting later this week, with higher oil prices adding to inflation concerns. The AfD won 44% of the vote, falling short of an overall majority but delivering a major blow to Chancellor Friedrich Merz’s conservatives. Meanwhile, Brent crude moved closer to seven-week highs after the US struck three Iranian oil tankers over the weekend, destroying one, while Tehran threatened to establish a new restricted zone outside the Strait of Hormuz. The ECB is expected to raise interest rates on Thursday, erring on the side of caution as the US-Iran war drags on, keeping oil prices elevated and reviving inflationary pressures. Traders are also pricing in roughly a 90% probability of a second rate hike by the end of the year.