US S&P Global PMI expected to highlight resilient business activity in June
- The S&P Global flash PMIs for June are expected to show stable business expansion.
- US data may have a different impact on the US Dollar following the Federal Reserve’s shift under Chair Kevin Warsh
- EUR/USD trades near its 2026 low of 1.1411 with a firm bearish bias.
S&P Global will release the June flash Purchasing Managers' Indices (PMIs) for most major economies, with the United States (US) data scheduled on Tuesday. These surveys of top private-sector executives are seen as an early indicator of the country’s economic health.
Market participants anticipate that the S&P Global Services PMI will print at 51, up from 50.7 in May, while S&P Global Manufacturing output is expected to print at 54.7, slightly below the previous month's 55.1 reading. The Composite PMI, a combination of manufacturing and services data, stood at 51.5 in May.
S&P Global separately reports manufacturing activity and services activity 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 readings below the threshold indicate contraction.
The preliminary or flash versions tend to have a broader impact on the US Dollar (USD).
What can we expect from the next S&P Global PMI report?
The impact this time could be larger than usual. Last week, the Federal Reserve (Fed) had a monetary policy meeting, and the announcement was not about interest rates, but about a shift in how the Fed decides and communicates. Sure, the dot plot in the Summary of Economic Projections (SEP) showed that policymakers now anticipate a rate hike this year, vs. the previous SEP, which anticipated a cut.
But market participants got far more nervous about Chair Kevin Warsh drastically reducing forward guidance. Not only was the Federal Open Market Committee (FOMC) statement halved, but Warsh also refrained from including his “views” in the dot plot. Warsh aims to completely shift the focus from guidance to rough data.
S&P Global PMIs may not be a game-changing data release and may have a limited impact on the FOMC’s decision. But market participants may well start weighing in data in the absence of forward guidance.
Additionally, the US Dollar (USD) heads into the release with uncertainty-related strength. The USD holds onto post-Fed gains and extends its advance amid caution over Middle East developments. Optimism reigned last week after the United States (US) and Iran signed a deal to extend the truce and go into deeper negotiations. The deal included the reopening of the Strait of Hormuz, something markets welcomed strongly. Weekend news, however, hit such markets’ confidence as Iranian authorities announced they would close the critical sea passage again. Negotiations continue, as well as navigation through the Strait, but optimism faded.
The Greenback is also firmer amid mounting speculation the Fed will deliver an interest rate hike before year-end. Despite Warsh's disbelief in forward guidance, his words leaned hawkish, while half of the FOMC voting members added a dot on rate hikes.
Back to PMIs, the figures are expected to confirm economic expansion continues in the US, with modest ticks in any direction having little relevance, as long as the figures remain within expansion territory. For sure, better-than-anticipated figures would boost the Greenback, while weaker-than-anticipated figures could trigger a near-term USD slide.
It’s also worth noting that the PMIs include inflation and employment sub-components that could reinforce or deny the market’s belief of upcoming interest rate moves. Inflationary pressures have been on the rise, which means that an uptick in the inflation-related index could add to rate hike speculation and push the USD even higher.
When will the June 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 on Tuesday, and as previously noted, are expected to show that US business activity continued to expand in June.
Valeria Bednarik, FXStreet Chief Analyst, notes: “The EUR/USD pair trades a handful of pips above the 2026 low of 1.1411 posted in March, and despite looking oversold in the near-term, the bearish momentum is strong enough to support lower lows ahead. From a technical perspective, the daily chart shows that technical indicators rotated south after a modest uptick within negative territory, while the pair extends its slide below all its moving averages. The 20-day Simple Moving Average (SMA) heads firmly lower at around 1.1560 and below the longer ones, usually an indication of sellers’ control.”
Bednarik adds: “A break below the aforementioned 2026 low exposes the 1.1360 price zone ahead of the 1.1300 threshold. Should the pair bounce, the first line of sellers aligns around 1.1470, a strong static resistance area, ahead of 1.1550.”
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
Economic Indicator
S&P Global Manufacturing PMI
The S&P Global Manufacturing Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging business activity in the US manufacturing sector. The data is derived from surveys of senior executives at private-sector companies from the manufacturing sector. 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. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the US Dollar (USD). Meanwhile, a reading below 50 signals that activity in the manufacturing sector is generally declining, which is seen as bearish for USD.
Read more.Next release: Tue Jun 23, 2026 13:45 (Prel)
Frequency: Monthly
Consensus: 54.7
Previous: 55.1
Source: S&P Global
Author
FXStreet Team
FXStreet
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