Euro: Recovery against US Dollar supported by data – BBH

Brown Brothers Harriman's Elias Haddad reports that the EUR/USD exchange rate is firmer but remains below the 1.1700 threshold. This strengthening in the Eurozone currency is attributed to improved economic data in Germany, as well as better-than-expected data from the Eurozone's PMI and ZEW surveys. Haddad believes that this positive economic activity, coupled with inflation at above-target levels, strengthens the case for the European Central Bank to raise interest rates at their September meeting, which is currently a 95% priced-in event.

In contrast, the Federal Reserve is expected to maintain a dovish stance, which adds to the Euro's advantage. The widening gap between the EU and US interest rates also contributes to the uptrend in EUR/USD, with the key resistance level currently sitting near 1.1800, while immediate support can be found at the 200-day moving average of 1.1632.

The article also mentions that GBP/USD surged higher in European trading, reaching near the 1.3650 mark. However, despite the US dollar recovery faltering due to US sanctions on Iran, hopes for diplomatic efforts in the Middle East conflict are providing some relief to the dollar. Gold prices, on the other hand, are on the decline, trading below $4,650 at the beginning of the European session. Meanwhile, Bitcoin continues its upward trend, trading above $80,000 following its strongest weekly increase in over three years.