21.08.202510:13:34UTC+00Euro Holds Narrow Range

The euro hovered around the $1.165 mark on Thursday, maintaining a stable range since the beginning of the week and sustaining much of its gains achieved this year. This stability occurred as markets continued to evaluate how both the Eurozone and US economies are responding to shifts in fiscal and monetary policies. Recent PMI data indicated a widespread expansion in activity within the Euro Area in August. The survey highlighted an increase in both new orders and price gauges, which bolstered arguments against significant rate cuts by the European Central Bank (ECB). ESTR futures show a broad consensus for only one rate cut this year. These factors bolstered the euro, especially after the European Commission successfully negotiated a trade agreement with the United States, preventing 30% tariff rates initiated by Trump and settling for a 15% base level instead. Throughout this year, the euro has appreciated by 11% against the dollar. This strength is attributed to EU nations' commitment to boosting expenditure aimed at stimulating industry, infrastructure, and defense, coupled with the precarious economic policies and fiscal challenges prompting a shift away from the US dollar.