The euro (EUR) remained stable against the US dollar (USD) on Wednesday, hovering near three-month lows as the greenback retained broad strength following upbeat US economic reports.
At the time of writing, EUR/USD was trading around 1.1477, showing little change despite a packed US data calendar. The US Dollar Index (DXY), which measures the greenback’s performance against a basket of six major currencies, was last seen near 100.30 — its highest level since May 29.
Fresh labor market and services data underscored the resilience of the US economy. The latest ADP Employment Change report showed private sector payrolls rose by 42,000 in October, outpacing expectations of a 25,000 gain and offsetting the 32,000 decline recorded in September.
Meanwhile, the ISM Services PMI rebounded sharply to 52.4 in October from 50.0 the previous month, signaling renewed expansion in the services sector for the eighth time this year. The details revealed stronger Business Activity (54.3) and New Orders (56.2), while Prices Paid jumped to 70.0, the highest in three years. However, the Employment Index stayed below the 50 threshold at 48.2, indicating continued softness in hiring.
Earlier, the S&P Global US Services PMI edged higher to 54.8 in October from 54.2 in September, marking the 33rd consecutive month of growth. The report noted steady demand and employment trends, though business confidence slipped to a six-month low amid uncertainty surrounding trade policies and government spending.
According to Chris Williamson, Chief Economist at S&P Global, the latest figures suggest that the US economy entered the fourth quarter with solid momentum, consistent with GDP expanding at an annualized rate of around 2.5%.
The combination of resilient services activity and firm labor market conditions has reinforced expectations that the Federal Reserve (Fed) will maintain a cautious stance following last week’s 25-basis-point (bps) rate cut. Based on the CME FedWatch Tool, markets now price in a 62% probability of another rate cut in December, down from 71% earlier in the day and 94% a week ago.
