EUR/USD Rallies to 1.1580 as Dollar Weakness Trumps European Growth
The EUR/USD pair has strengthened to around 1.1580, its highest level since mid-June, driven by weakness in the US dollar rather than any significant improvement in European data.
A combination of softer-than-expected US retail sales and shifting central bank expectations led to a decline in the dollar index, pushing the EUR/USD pair upward.
The pair's advance is largely dollar-driven, with European economic indicators showing modest growth. The second-estimate Q2 GDP confirmed 0.4% quarter-on-quarter and 1.0% year-on-year expansion, but July's composite PMI rose to 52.0, driven by services.
The key challenge for the EUR/USD pair lies ahead, with the Fed's FOMC minutes due on Wednesday potentially shifting expectations back toward a rate hike in September.