Euro Hits Two-Month High as Investors Eye ECB Rate Hike

The Euro strengthened to a two-month high against the US dollar on Wednesday, reaching $1.1609. This increase comes as investors anticipate a rate hike by the European Central Bank (ECB), while the Federal Reserve is expected to keep rates steady.

Despite concerns over elevated energy prices and ongoing tensions in the Middle East, the ECB's chief economist, Philip Lane, emphasized that the region's 3% inflation rate remains too high, potentially leading to adjustments in policy rates.

The German ZEW Survey - Economic Sentiment came in at 34.2 in August, exceeding estimates of 30.00, while the ZEW Survey - Current Situation improved to -61.1 from -77.6 in July, beating expectations of -68.8.

Markets are now awaiting ECB President Christine Lagarde's speech later today, which is likely to provide further insight into the bank's monetary policy decisions.