30.07.202612:09:48UTC+00Euro Rises on Strong Eurozone Data and ECB Rate Hike Bets

The euro climbed to $1.148, its highest level since June 17, after stronger-than-expected eurozone data bolstered expectations that the European Central Bank could deliver a second interest rate hike this year, potentially as early as September. This optimism helped offset market concerns over escalating tensions in the Middle East and growing divisions within the Federal Reserve.

Eurozone GDP grew by 0.4% in the second quarter, doubling the consensus forecast of 0.2% and marking the fastest pace of expansion since early 2025. Spain led the bloc with a robust 0.7% increase, while Germany, France, and Italy each posted 0.2% growth. Stronger inflation readings in Germany and Spain further reinforced expectations of additional ECB tightening.

At the same time, renewed US airstrikes on Iran pushed oil prices higher and dampened risk appetite. Policy uncertainty was compounded on Wednesday when the Federal Reserve left interest rates unchanged, despite three FOMC members dissenting in favor of an immediate hike.