Euro steadies around 1.1540 after an upward revision of Eurozone's Services PMI

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Euro steadies around 1.1540 after an upward revision of Eurozone's Services PMI

EUR/USD stands at 1.1530, with seven-month highs at 1.1558 within a short distance.
Eurozone July's final HCOB Services PMI has been revised higher on Wednesday.
Risk appetite on hopes of a peace deal in Iran and lower Oil prices are providing additional support to the EUR.

The Euro (EUR) holds marginal gains against the US Dollar (USD) on Wednesday, with the EUR/USD pair consolidating around the 1.1530 area, a few pips below seven-week highs at 1.1558. Hopes of a diplomatic breakthrough in the Middle East and lower Oil prices are buoying the Euro, while the upward revision of the Eurozone’s services activity data has contributed to supporting the common currency.

Eurozone’s final HCOB Services PMI has been revised higher to 51.7, from the previous 51.6 reading. These figures confirm that the sector returned to expansion levels following three consecutive months of contraction, thanks to a significant improvement from June’s 49.4 reading.

Previously, German Services activity data was revised up to a 49.8 reading from previous estimates of 49.6, confirming an improvement from June’s 48.6 reading. France’s Services PMI, on the other hand, has been revised down to a 49.6 reading from the 49.8 preliminary estimate, still showing an improvement from the 46.8 reading seen in June. PMIs from Italy and Spain have also shown expansionary levels.

Lower Oil prices are giving some oxygen to Eurozone's economy

A moderate risk appetite amid hopes that the US-Iran conflict might have a negotiated outcome is supporting the Euro, while lower Oil prices ease the burden in Crude-importing Eurozone Economies.

The US Dollar, on the contrary, is struggling amid the risk-on mood and fading expectations that the Federal Reserve will hike interest rates in September. US data released on Wednesday was far from supportive, as Job Openings declined more than forecasted and Factory Orders contracted against expectations. Bets for a Fed rate hike in September have eased to 58% from 57% on Tuesday, according to the CME Group’s FedWatch tool, which is keeping US Dollar bulls subdued.

Economic Indicator

HCOB Services PMI

The Services Purchasing Managers Index (PMI), released on a monthly basis by S&P Global and Hamburg Commercial Bank (HCOB), is a leading indicator gauging business activity in the Eurozone services sector. As the services sector dominates a large part of the economy, the Services PMI is an important indicator gauging the state of overall economic conditions. The data is derived from surveys of senior executives at private-sector companies from the services sector. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the Euro (EUR). Meanwhile, a reading below 50 signals that activity among services providers is generally declining, which is seen as bearish for EUR.

Economic Indicator

HCOB Services PMI

The Services Purchasing Managers Index (PMI), released on a monthly basis by S&P Global and Hamburg Commercial Bank (HCOB), is a leading indicator gauging business activity in Germany’s services sector. The data is derived from surveys of senior executives at private-sector companies from the services sector. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the Euro (EUR). Meanwhile, a reading below 50 signals that activity among service providers is generally declining, which is seen as bearish for EUR.