Euro Zooms Past 1.1700 as Eurozone Flash PMIs Surprise

The Euro (EUR) has reached near three-month highs against the US Dollar (USD), driven by solid business activity figures from the Eurozone. The common currency is trading a few pips below 1.1700, with a potential for a more than 1% weekly rally.

According to recent Flash PMI data, Manufacturing activity in the Eurozone accelerated to 52.8 in July, beating market expectations of a decline to 51.8. Services activity remained unchanged at 51.7, above consensus estimates of a slowdown to 51.5.

The US Treasury's plan to boost buybacks of long-term Treasuries has weighed on the USD, as investors reassess the policy outlook and fiscal backdrop. Strategists at Scotiabank argue that the Treasury is trying to manage longer-term rates, which have been rising due to concerns over inflation fighting and US fiscal policy sustainability.