Euro holds gains against the Pound awaiting Eurozone and UK Services PMIs

The Euro (EUR) steadied around 1.1540 against the US Dollar (USD) on Wednesday, consolidating near seven-week highs at 1.1558. Positive sentiment from a potential diplomatic breakthrough in the Middle East and decreasing Oil prices supported the Euro. The Eurozone's Services Purchasing Managers Index (PMI) was revised upward to 51.7, signaling the sector returned to expansion following three months of decline.

This improvement was driven by significant gains in Germany's services activity, with its PMI rising from 49.4 to 49.8. France's PMI decreased to 49.6 from the preliminary estimate of 49.8, still reflecting an improvement from June's 46.8. Italy and Spain also showed expansionary levels. A moderate risk appetite, stemming from hopes of a negotiated outcome to the US-Iran conflict, and lower Oil prices helped buoy the Euro.

The US Dollar, however, faced challenges amid a risk-on mood and reduced expectations of a Federal Reserve rate hike in September. The US Treasury's decision to double liquidity support buyback operations for longer-dated nominal coupon securities weighed on the US Dollar, contributing to its decline. The Services PMI, a key indicator of Eurozone economic health, is a leading gauge of business activity in the services sector, which accounts for a significant portion of the Eurozone economy.