Euro Surges Above $1.1640 as Dollar Weakness Continues
The Euro has surged above $1.1640 against the US Dollar on Wednesday's early European session, reaching its highest level in 12 days despite high oil prices and a risk-off market sentiment.
Rabobank analysts attribute the weakness of the US Dollar to the 'Dollar debasement debate' triggered by US Treasury Secretary Bessent's bond intervention announcement on August 19. This has undermined confidence in the greenback, making it difficult for the currency to capitalize on rate expectations.
The market is bracing for a quarter-point rate hike by the European Central Bank (ECB) on Thursday, which may have contributed to the Euro's rally. However, analysts at Rabobank warn that euro rallies are likely to remain shallow due to high oil prices and the deteriorating situation in the Gulf.
The calendar is thin on Wednesday, with ECB President Christine Lagarde's speech at the Deutsche Bundesbank in Berlin being the only notable event. However, she will not discuss monetary policy ahead of Thursday's meeting.