US: ISM Manufacturing PMI declines to 47.4 in January vs. 48 expected

US ISM Manufacturing PMI fell more than expected in January.
US Dollar Index stays in negative territory below 102.00.

Eren Sengezer FXStreet

The economic activity in the US manufacturing sector continued to contract at an accelerating pace in January with the ISM Manufacturing PMI dropping to 47.4 from 48.4 in December. This reading came in below the market expectation of 48.

Underlying details of the report revealed that the Employment Index edged slightly lower to 50.6 from 50.8 and the Prices Paid Index climbed to 44.5 from 39.4. Finally, the New Orders Index slumped to 42.5 from 45.1.

Commenting on the survey's findings, "the US manufacturing sector again contracted, with the Manufacturing PMI at its lowest level since the coronavirus pandemic recovery began," noted Timothy R. Fiore, Chair of the Institute for Supply Management Manufacturing Business Survey Committee.

"With Business Survey Committee panelists reporting softening new order rates over the previous nine months, the January composite index reading reflects companies slowing outputs to better match demand in the first half of 2023 and prepare for growth in the second half of the year," Fiore further noted.

Market reaction

The US Dollar Index staged a modest rebound with the initial reaction and was last seen losing 0.25% on the day at 101.83.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

GBP/USD drops to multi-month troughs near 1.3140

GBP/USD adds to Tuesday’s pullback and recedes to the lowest level since November 2025 near 1.3140. A firmer Greenback and continued political turmoil in the UK are keeping Cable under persistent pressure, with little sign of a meaningful recovery.

EUR/USD bounces off YTD lows around 1.1320

EUR/USD extends its decline on Wednesday, falling to fresh yearly lows near 1.1320. The pair remains on the defensive as the US Dollar continues to draw support from hawkish Fed expectations and uncertainty over the outcome of US-Iran peace negotiations.

Gold trims losses, back above $4,000

Gold retreats further and breaches below the key $4,000 mark per troy ounce for the first time since November 2025 on Wednesday. Higher-for-longer Fed expectations and a broadly firmer US Dollar continue to weigh on the precious metal, while uncertainty surrounding a potential US-Iran peace agreement has done little to revive demand for the safe haven space.

Crypto Today: Bitcoin, Ethereum, XRP trade under pressure as September Fed rate-hike odds increase

Bitcoin is trading between $62,000 and $63,000 at the time of writing on Wednesday, weighed down by headwinds stemming from macroeconomic uncertainty and geopolitical tensions in the Middle East.

5.90% to 5.45%: Why the Pound ignored the bond market’s relief rally

Keir Starmer resigned on Monday, and the Pound barely moved. That near-silence is the tell. Sterling's real driver these past four months has not been the prime minister, nor the left-leaning frontrunner lining up to replace him, but the long end of the gilt curve, which answers to a force no British politician controls.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.