EURUSD Surges to Two-Month High Amid Weaker US Data

The EURUSD currency pair reached its highest level in two months on August 17, 2026, climbing to 1.1593 and marking a 0.22% increase from the previous close of 1.1567.

This surge reflects a shift in market sentiment driven by weaker-than-expected US economic data, including a drop in Non-Farm Payrolls, slower core inflation, and decreased retail sales. These indicators collectively suggest a cooling US economy, reducing the Federal Reserve's urgency to tighten monetary policy further.

Market pricing now assigns less than a 30% chance of a September Fed rate hike, down sharply from prior expectations, which has weakened the US dollar broadly.

The euro side is supported by persistent inflation at 2.9% in July, well above the European Central Bank's (ECB) target. The ECB may respond with a likely rate hike in September, and bond yields have climbed to near 15-year highs reflecting inflation concerns and geopolitical risks.