Euro Surges Toward $1.17 as Dollar Hits Three-Month Low

The euro has jumped towards $1.17, reaching its strongest level since May, as Washington's intervention in the bond market has weakened the dollar to a three-month low.

This rally is largely driven by dollar weakness rather than any significant support from Europe, according to recent analysis.

Traders expect around 45 basis points of additional tightening from the European Central Bank (ECB) this year, which would favor the euro. In contrast, there are only about 67% odds that the Federal Reserve leaves US rates unchanged in September.

The region's current-account surplus has also contributed to the euro's strength, widening to a seasonally adjusted €35.1 billion in June from €25.8 billion. This means more money is entering through trade and investment income than leaving, creating an underlying source of demand for the euro.