Euro Struggles Above 1.1600 as ECB Faces Pressure to Hike Rates

The Euro (EUR) has struggled to break above 1.1600 against the US Dollar (USD), despite some gains on Wednesday, following last week's decline of 0.8%. This comes as the Eurozone's services sector growth has been revised down, with a reading of 51.7, compared to previous estimates of 52.1.

The German Services PMI was revised up to 49.7 in August, but still remains below the contraction level of 50. In contrast, France's services PMI showed a downward revision to 48, while Italy and Spain saw stronger figures at 55.2 and 57.8 respectively.

The European Central Bank (ECB) is under pressure to hike interest rates later this month, following data showing factory inflation rose to 1.2% in July. However, analysts at ING caution that ECB policymakers may be more concerned about widening bond spreads than second-round inflation risk.