Euro holds gains near seven-week highs as economic sentiment improves

The Euro (EUR) strengthened against the US Dollar (USD) on Monday, trading near a seven-week high around 1.1560, with the EUR/USD pair hovering just below the seven-week peak at 1.1773. Investors' improved confidence in the Eurozone economy provided additional support to the Euro. The Sentix research institute's data showed that investor confidence in the Eurozone economy improved significantly in August, reaching positive levels for the first time since February, with a 0.9 reading.

This was an improvement from -.3.1 in July and -13.4 in June. The current economic conditions sub-Index rose by 6.8 points, while economic expectations improved by 1.0. The Global Aggregate rose by 1.4 points, to 14.7, indicating broad-based economic recovery expectations. The strengthening USD was dampened by a weaker-than-expected US Nonfarm Payrolls data, which reduced hopes for immediate Federal Reserve interest rate hikes.

Meanwhile, the focus shifted to US Consumer Price Index (CPI) figures for July, expected to be released next Wednesday, which could provide further insights into the Fed's rate path.