Euro Surges as Weaker USD Meets Stronger Eurozone Growth

The Euro is benefiting from a weaker US Dollar and stronger-than-expected Eurozone growth data. The EUR/USD pair holds modest gains at around 1.1626, with traders expecting subdued trading conditions due to the Labor Day holiday in the US.

The Greenback remains under pressure as broad Japanese Yen strength outweighs support from hawkish Federal Reserve expectations and geopolitical tensions. The USD/JPY falls to a seven-month low near 154.50, while the US Dollar Index (DXY) hovers near two-week lows around 98.91.

The Eurozone economy expanded 0.6% QoQ in the second quarter, beating the earlier estimate and market forecast of 0.4%. The European Central Bank is widely expected to raise its Deposit Facility Rate by 25 basis points (bps) to 2.50% on Thursday.