US business activity lost momentum in September, according to the flash reading of S&P Global’s Composite PMI, which ticked down to 53.6 from 54.6 in August. The index, where any reading above 50 indicates expansion, points to a private sector that seems to be struggling to strengthen further.
The details painted an upbeat picture. Manufacturing remained within growth territory, despite its PMI easing to 52 from 53, signalling waning momentum in the sector. Services, by contrast, lost a touch of steam, slipping to 53.9 from 54.5, suggesting demand there may be easing.
Following the news release, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, argued: “Further robust growth of output in September rounds off the best quarter so far this year for US businesses. PMI survey data are consistent with the economy expanding at a 2.2% annualized rate in the third quarter.”
Market reaction
The Greenback clings to daily gains in the wake of the release, hovering around the 93.40 zone when tracked by the US Dollar Index (DXY).
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.14% | -0.07% | 0.06% | 0.07% | -0.06% | 0.19% | -0.05% | |
| EUR | -0.14% | -0.07% | -0.05% | -0.01% | -0.12% | 0.11% | -0.13% | |
| GBP | 0.07% | 0.07% | 0.08% | 0.07% | -0.05% | 0.18% | -0.06% | |
| JPY | -0.06% | 0.05% | -0.08% | 0.00% | -0.08% | 0.12% | -0.03% | |
| CAD | -0.07% | 0.00% | -0.07% | -0.00% | -0.12% | 0.12% | -0.12% | |
| AUD | 0.06% | 0.12% | 0.05% | 0.08% | 0.12% | 0.23% | 0.07% | |
| NZD | -0.19% | -0.11% | -0.18% | -0.12% | -0.12% | -0.23% | -0.23% | |
| CHF | 0.05% | 0.13% | 0.06% | 0.03% | 0.12% | -0.07% | 0.23% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
This section below was published as a preview of the US S&P Global PMI data at 08:00 GMT
- The S&P Global flash PMIs for September are expected to show continued expansion in the month.
- The employment and inflation sub-indices will gather modest attention ahead of PCE inflation data.
- EUR/USD likely to remain rangebound in the near term, bulls in pause.
S&P Global will release on Tuesday the September flash Purchasing Managers’ Indices (PMIs) for most major economies, including the United States (US). These surveys of top private sector executives provide an early indication of the business sector’s economic health.
Market participants anticipate that the Services PMI will print at 53.9, following the 54.5 posted in August, while manufacturing output is expected to print at 52.0, slightly below the 53.0 reading of the previous month. Finally, the Composite PMI is expected to match the August final reading at 54.6.
S&P Global separates manufacturing activity from services activity, reporting them separately through the Manufacturing PMI and the Services PMI. Additionally, they present a weighted combination of the two, the Composite PMI. Generally speaking, a reading of 50 or more indicates expansion, while below the threshold, the indexes indicate contraction.
The report has two versions, a preliminary estimate and a final revision, which comes around two weeks later. These preliminary versions or flash estimates tend to have a broader impact on the US Dollar.
Nevertheless, the encouraging recovery of the Manufacturing PMI above the 50 mark that separates contraction from expansion fueled hopes for healthy economic progress. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, argued, “A strong flash PMI reading for August adds to signs that US businesses have enjoyed a strong third quarter so far. The data are consistent with the economy expanding at a 2.5% annualised rate, up from the average 1.3% expansion seen over the first two quarters of the year.”
What can we expect from the next S&P Global PMI report?
The unexpected recovery in manufacturing output has lifted the bar for the September release. Investors will look for confirmation that the US economy is progressing at a steady pace and remains in expansionary territory.
With that in mind, figures in line with expectations will be viewed as positive news, particularly in relation to the Manufacturing PMI. Upbeat numbers could result in Wall Street extending its record rally and partially revive demand for the US Dollar. Finally, a worse-than-anticipated outcome will likely push the USD further down amid fresh speculation of steeper interest rate cuts.
Beyond the headline readings, the reports include sub-indices on employment and inflation, closely watched by market players. More punctual inflation data will be released on Friday, when the US will publish the Personal Consumption Expenditure (PCE) Price Index, which mitigates the potential impact of the PMIs subindex. Still, given the absence of other relevant data, expect financial markets to react to the preliminary S&P Global estimates.
When will the September flash US S&P Global PMIs will be released and how could they affect EUR/USD?
The S&P Global Manufacturing, Services, and Composite PMIs reports will be released at 13:45 GMT on Tuesday, and as previously noted, are expected to show that US business activity continued to expand in September.
Ahead of the release, the USD trades with a weak tone against most major rivals. The Greenback consolidates not far from yearly lows against the Euro (EUR).
Valeria Bednarik, FXStreet Chief Analyst, notes: “The EUR/USD pair has been trading in a well-limited range since mid-August, reaching a fresh 2025 peak of 1.1918 in the Fed’s monetary policy announcement aftermath, but quickly retreating to sub-1.1800. The technical outlook indicates that bulls retain the lead, but are hesitant to push it further upward. The daily chart for the pair shows that buyers are defending the downside at around a mildly bullish 20 Simple Moving Average (SMA) at 1.1720. At the same time, technical indicators bounced from near their midlines and offer modest upward slopes within positive levels, albeit far below the previous week’s peak. Indicators have remained within positive levels since September began.”
Bednarik adds: “Immediate resistance for EUR/USD comes at 1.1830, the former 2025 peak ahead of the aforementioned 1.1918 level. Additional gains, unlikely to be triggered by the S&P Global PMIs release, expose the 1.2000 threshold. On the contrary, initial support comes at the aforementioned 1.1720 region, ahead of the 1.1660 area. Further slides expose the 1.1600 mark, an unlikely extreme for this particular event.”
GDP FAQs
A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022.
Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.
A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency.
When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.
When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.