US S&P Global Composite PMI improves to 54.8 in October

Sagar Dua FXStreet

Business activity in the United States' (US) private sector expanded at a healthy pace in October, with the S&P Global Composite Purchasing Managers' Index (PMI) improving to 54.8 in the flash estimate from 53.9 in September.

In this period, the S&P Global Manufacturing PMI edged higher to 52.2 from 52, while the Services PMI climbed to 55.2 from 54.2. Both of these prints came in better than analysts' estimates.

Assessing the survey's findings, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, stated, "October’s flash PMI data point to sustained strong economic growth at the start of the fourth quarter, with business activity picking up momentum across both manufacturing and services despite some reports of businesses being adversely impacted by the government shutdown."

Market reaction to US PMI data

The US Dollar Index recovered slightly from session lows after the upbeat PMI data and was last seen trading flat on the day at 98.94.

US Dollar Price This week

The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Japanese Yen.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.35%	0.75%	1.53%	0.11%	-0.28%	-0.26%	0.43%
EUR	-0.35%		0.41%	1.30%	-0.23%	-0.52%	-0.68%	0.09%
GBP	-0.75%	-0.41%		0.65%	-0.64%	-0.93%	-1.08%	-0.33%
JPY	-1.53%	-1.30%	-0.65%		-1.48%	-1.83%	-1.87%	-1.21%
CAD	-0.11%	0.23%	0.64%	1.48%		-0.34%	-0.44%	0.31%
AUD	0.28%	0.52%	0.93%	1.83%	0.34%		-0.16%	0.60%
NZD	0.26%	0.68%	1.08%	1.87%	0.44%	0.16%		0.76%
CHF	-0.43%	-0.09%	0.33%	1.21%	-0.31%	-0.60%	-0.76%

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.

US flash S&P Global PMI Overview

The preliminary United States (US) S&P Global Purchasing Managers’ Index (PMI) data for October is due for release today at 13:45 GMT. The report is expected to show that the overall business activity in the private sector grew at a moderate pace.

The Manufacturing PMI is expected to have remained steady at 52.0. The forecast for activities in the services sector is expected to have expanded again, but at a moderate pace. The Services PMI is seen lower at 53.5 from 54.2 in September.

How could US flash PMI affect EUR/USD?

EUR/USD trades in a tight range slightly above 1.1600 during the late European trading session on Friday. The major currency pair demonstrates a broader sideways trend amid a Symmetrical Triangle chart pattern formation.

The upward border of the above-mentioned chart pattern is placed from the September 17 high around 1.1920, while the downward border is plotted from the August low near 1.1390.

The major currency pair trades close to the 20-day Exponential Moving Average (EMA) from the past few trading weeks, suggesting indecisiveness among investors.

The 14-day Relative Strength Index (RSI) oscillates inside the 40.00-60.00 range, indicating a sharp volatility contraction.

Looking up, the EUR/USD pair could revisit its four-year high around 1.1920 if it breaks above the October 17 high of 1.1728. On the downside, the August low around 1.1400 will be a key support zone for the pair in case the pair slides below the October 9 low of 1.1542.

Economic Indicator

S&P Global Services PMI

The S&P Global Services Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging business activity in the US services sector. As the services sector dominates a large part of the economy, the Services PMI is an important indicator gauging the state of overall economic conditions. The data is derived from surveys of senior executives at private-sector companies from the services 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 services economy is generally expanding, a bullish sign for the US Dollar (USD). Meanwhile, a reading below 50 signals that activity among service providers is generally declining, which is seen as bearish for USD.