Euro Increases After Strong Services PMI Data

The euro strengthened slightly against the US dollar today. The EUR/USD was up 0.11% and is trading at 1.1757. The crisis in Catalonia does not have a big impact on the euro yet, but the situation remains unstable, as the Spanish government and the Catalan regional government still did not find a unified decision over the Sunday’s referendum on independence.

German Services PMI was in line with the forecast of 55.6. The Eurozone Services PMI improved to 55.8, exceeding the forecast of 55.6 points.

The US economy continues to grow successfully, and the labor market is still close to full employment. But still, inflation remains well below the Fed's target of 2%. Representatives of the FOMC are still divided over the next rate increase in 2017. Fed Chair Janet Yellen hinted that she was in favor of raising rates in December. According to the latest issue of CME Fed Watch, the chances of a rate hike in December rose to 76%.