Euro Surges Near Three-Month Highs Amid Eurozone Growth
The Euro has been trading near three-month highs against the US Dollar, boosted by strong business activity figures in the Eurozone. The common currency is on track for a more than 1% weekly rally, with its current price just a few pips below $1.1700. This move comes as the Eurozone's Flash Purchasing Managers' Index (PMI) data revealed that manufacturing activity accelerated to 52.8 in July, exceeding expectations of a decline to 51.8.
Services activity remained unchanged at 51.7, also above market consensus. In contrast, German PMI figures showed a mixed picture, with services activity accelerating its contraction to 48.5 from 49.8 in June. However, manufacturing PMI rose to a 51-month high of 54.1, beating expectations of a slight deceleration to 52.0.
The US Treasury's plan to boost buybacks of long-term Treasuries has weighed on the USD, as strategists at Scotiabank argue that 'the Treasury is trying to manage longer-term rates, which have been rising because markets are questioning the Fed's commitment to inflation fighting and investors are worried about the sustainability of US fiscal policy.'