# Euro Reaches Two-Month Highs Against Pound Despite Service Sector PMI Downward Revisions

> EUR/GBP tests the 0.8600 mark driven by policy divergence between the ECB and BoE, while weak US ADP data pressures the dollar and diesel crack spreads hit record highs.

**Type:** article · **Category:** Market · **Published:** 2026-09-03 · **Source:** TrendKia
**Canonical:** https://trendkia.com/en/market/eur-gbp-at-two-month-highs-following-services-pmis-27074 · **Language:** English
**Tags:** Forex Market, EUR/GBP, Services PMI, ECB, Bank of England, Gold Price, US Dollar

Euro bulls are maintaining strong upward momentum this week, driving the EUR/GBP currency pair toward two-month highs near the 0.8600 threshold. Despite downward revisions in final August Services Purchasing Managers Index (PMI) data for both the Eurozone and the United Kingdom, the shared currency has gained roughly 0.5% over the course of the week. The rally is primarily underpinned by growing monetary policy divergence between the European Central Bank and the Bank of England, positioning the Euro as a standout performer in global foreign exchange markets.

## Monetary Policy Divergence Drives Euro Gains Amid Revised PMIs
Fresh economic data highlighted slight slowdowns across European services industries. The final HCOB Eurozone Services PMI for August was revised down to 51.6 from the initial flash estimate of 51.7. Similarly, the UK S&P Global Services PMI received a downward revision to 52.5 from its preliminary reading of 52.8. Despite these modest pullbacks, institutional demand for the Euro remained robust. Across major currency crosses, the Euro posted its strongest performance against the US Dollar, according to daily currency performance trackers.

## Technical Structure and Key EUR/GBP Price Levels
From a technical standpoint, EUR/GBP faces a critical test near the 0.8600 to 0.8610 resistance band. This zone represents a prior support area defined by the lows of June 23, 25, and 30. A decisive breakout above this barrier could pave the way toward 0.8630, matching the measured target of a consolidated triangle pattern and aligning with the June 29 peak. Conversely, if buyers lose momentum, immediate downside support rests near the previous high of 0.8585. Further declines would bring Wednesday low of 0.8565 and the triangle base near 0.8560 into focus.

## Global Forex Overview: USD/JPY Pressure and AUD/USD Range
In broader currency trading, USD/JPY extended its sell-off below 157.00 during Thursday European hours. The slide was prompted by a disappointing US ADP employment report, which triggered broad-based selling in the US Dollar. Concurrently, hawkish expectations surrounding the Bank of Japan alongside potential currency intervention risks provided steady support for the Japanese Yen. Meanwhile, AUD/USD struggled to build on its recovery from a near two-week low, consolidating above 0.7150 in Asian trade. Weak Australian trade figures offset upbeat Chinese RatingDog Services PMI data, while geopolitical tensions between the US and Iran coupled with Federal Reserve rate expectations kept Australian Dollar gains capped.

## Commodities Breakdown: Gold Bids and Unprecedented Diesel Spreads
Precious metals saw steady buying interest ahead of the European open, with spot gold maintaining a positive tone below $4,450. Soft US private payrolls data and declining Treasury yields assisted gold in recovering from nearly four-week lows, though elevated energy prices continue to anchor inflation risks and yield floors. In energy markets, severe supply dynamics pushed the US diesel crack spread—the premium of ultra-low sulfur diesel futures over WTI crude—above $100 per barrel for the first time on record, touching an intraday peak of $102.00.

## Focus Shifts to US ISM Services PMI Release
Traders are awaiting the release of the US Institute for Supply Management (ISM) Services PMI, scheduled for Thursday at 14:00 GMT. Market consensus anticipates a slight rise to 54.3 for August, up from 54.1 recorded in July. A reading in line with expectations would confirm ongoing resilience in the service sector, providing temporary support to broader market sentiment and economic expectations.

## What this means for you
Fluctuations in global currency markets and commodity benchmark spreads directly impact international trade and retail investment portfolios.

- **For Global Investors:** Shifts in currency strength between the Euro, Pound, and Dollar alter cross-border investment yields and asset allocation strategies.
- **For Energy Consumers:** Record-high diesel crack spreads signal elevated refining margins, which can lead to higher transportation and freight costs globally.
- **For Forex Traders:** EUR/GBP testing the 0.8600 level provides critical breakout and support benchmarks for managing trading risk.
- **For Commodity Buyers:** Gold maintaining levels below $4,450 reflects sensitivity to US bond yields and Federal Reserve interest rate policy expectations.

## Questions & Answers

### 1. What is driving the current rally in EUR/GBP?
The rally is primarily driven by policy divergence between the European Central Bank and the Bank of England.

### 2. What were the revised August Services PMI figures?
The Eurozone Services PMI was revised to 51.6, while the UK Services PMI was revised to 52.5.

### 3. What are the key resistance levels for EUR/GBP?
Immediate resistance lies between 0.8600 and 0.8610, with a further upside target near 0.8630.

### 4. What record did the US diesel crack spread reach?
The US diesel crack spread surpassed $100 per barrel for the first time, reaching an intraday peak of $102.00.

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