• The S&P Global flash PMIs for August are expected to show a modest downtick from July levels.
  • Market participants will pay close attention to employment and inflation-related subindexes.
  • EUR/USD trades within familiar levels amid the absence of a clear catalyst.

S&P Global will release on Thursday the August flash Purchasing Managers’ Indices (PMIs) for the United States (US), surveys of top private sector executives, which provide an early indication of the business sector’s economic health.

Ahead of the announcement, market participants anticipate that the August flash Manufacturing PMI will tick lower, to 49.5 from the current 49.8. The services index is foreseen at 54.2, easing from the 55.7 posted in July. Investors also project that Composite PMI will print at 53.

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 alongside official figures. Finally, it is worth noting that each report analyses everything from production and export patterns to capacity utilisation, employment, and inventory levels, offering some of the earliest signs of the economy’s direction.

The July Composite PMI was confirmed at 55.1, better than the 52.9 posted in June. The services sector expanded while the manufacturing one stood in contraction territory, with the indexes resulting at 55.7 and 49.8, respectively.

“A jump in US business activity was witnessed via the S&P Global PMI data for July. Growth hit the highest seen so far this year. However, the upturn was uneven, being fueled largely by tech and financial services, with large swathes of the economy struggling to grow amid heightened uncertainty. Business confidence in the year ahead has sunk to one of the lowest levels seen over the past three years amid concerns over government policy and the impact of tariffs, the latter of concern in particular in relation to inflation,” Chief Business Economist Chris Williamson stated following the July release.

What can we expect from the next S&P Global PMI report?

The anticipated decline in August PMIs should have no significant impact on the Greenback, and hence on financial markets, as the poor performance of the manufacturing sector is no news. However, lower-than-expected figures could have a negative impact on the market’s sentiment. Poor figures could also boost concerns about the US economic progress and lift the odds for steeper interest rate cuts before year-end. However, such a chance is quite limited as the figures need to be near terrible, an unlikely scenario.

An outcome in line with expectations would highlight the subindexes of the PMIs reports, particularly related to employment and input and output prices, as market players will be looking for additional clues towards the Federal Reserve (Fed) September monetary policy meeting.

Finally, better-than-anticipated figures above the 50 threshold would likely boost demand for the US Dollar (USD), indicating a healthy economy without significantly affecting the odds for a September 25 basis points (bps) interest rate cut.

When will the August flash US S&P Global PMIs 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 and are expected to show that US business activity continued to expand in August, but at a slower pace than the previous month.

Ahead of the release, the US Dollar seesaws between familiar levels with a modest upward bias, nothing relevant.

Valeria Bednarik, FXStreet Chief Analyst, notes: “The EUR/USD pair has been trading in a well-limited range for almost two weeks, finding buyers at around the 1.1600 mark and quickly reversing after peaking past the 1.1700 threshold. A recent high at 1.1730 provides critical resistance, as gains beyond the latter would probably open the door for a test of the 2025 yearly high at 1.1830. An interim resistance could be found at around 1.1770.”

Bednarik adds: “The overall risk skews to the upside, yet a near-term slide is not out of the picture. The weekly low at 1.1622 provides immediate support ahead of 1.1590, where EUR/USD bottomed on August 11. A fall below the latter could lead to a test of the 1.1550 area.”

Risk sentiment FAQs

In the world of financial jargon the two widely used terms “risk-on” and “risk off” refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.

Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.

The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.

The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.

Economic Indicator

S&P Global Composite PMI

The S&P Global Composite Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging US private-business activity in the manufacturing and services sector. The data is derived from surveys to senior executives. Each response is weighted according to the size of the company and its contribution to total manufacturing or services output accounted for by the sub-sector to which that company belongs. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the private economy is generally expanding, a bullish sign for the US Dollar (USD). Meanwhile, a reading below 50 signals that activity is generally declining, which is seen as bearish for USD.

Read more.

Next release:
Thu Aug 21, 2025 13:45 (Prel)

Frequency:
Monthly

Consensus:
–

Previous:
55.1

Source:

S&P Global