Euro Surges to Three-Month High as US Treasury Doubles Bond-Buying Operations

The Euro (EUR) surged to a three-month high against the US Dollar (USD), reaching around 1.1693 during Thursday's European trading session.

This move was triggered by the United States Treasury Department's announcement that it will double down on its bond-buying operations to curb higher borrowing costs, resulting in plunging long-dated bond yields.

The 10-year US Treasury yield dropped to 4.64%, a 10 basis point decrease from Tuesday's peak, and only partially affected European markets, where primary market activity remained steady with numerous SSA and covered bond deals.

The US Dollar Index (DXY), which tracks the value of the Greenback against six major currencies, declined to a fresh 11-week low near 98.70 in the European session.

Strategists at Danske Bank noted that EUR/USD 'spiked higher' after the US Treasury's announcement and that the pair's position above its 20-period exponential moving average (EMA) at 1.1547 suggests a constructive near-term bias, although overbought conditions could cap upside in the short run.