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Euro firms near 1.1710 as US dollar slides

EUR/USD rose 0.2% to about 1.1710, the highest level in more than three months, as a weaker US dollar index fell toward 98.67 amid shifting rate expectations.

Reported · Written up by our desk · Major Pairs

The euro advanced against the US dollar in European trade, with EUR/USD up 0.2% to around 1.1710, the highest level in more than three months. FXStreet attributed the move to US dollar weakness driven by multiple headwinds, including the US Treasury’s decision to increase bond-buying operations and a reduction in hawkish Fed rate expectations.

At the same time, the US Dollar Index, which tracks the greenback against six major currencies, was down 0.17% to near 98.67 after revisiting a three-month low of 98.56 the prior day. The yen, like other major currencies in the heat map referenced by FXStreet, showed varying percentage moves against the dollar on the day.

FXStreet also cited major bank views behind the outlook for EUR/USD. Commerzbank said the dollar could face renewed pressure once the war with Iran ends and it does not expect the Fed to deliver the rate hikes currently priced by markets, while instead foreseeing pronounced and potentially excessive rate cuts again in 2027.

Separately, DBS described EUR as the “prime beneficiary” of dollar weakness and pointed to euro area inflation data. It said Eurozone July CPI met expectations, with headline and core inflation at 2.9% year over year and 2.5% year over year, respectively, supporting the euro’s appeal as markets increasingly focus on an expected ECB rate rise in September.

Latest closeEUR/USD 1.157 ▲0.4%|Dollar index 99.64 ▼0.3%

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