Forex Investors are assessing August manufacturing activity data: the S&P Global index rose from 49.8 to 53.0, missing forecasts of 53.3 but returning to the growth zone, while the ISM index increased from 48.0 to 48.7 instead of the expected 49.0. This indicates resilience in the industrial sector despite global instability, suggesting the Federal Reserve may take a wait-and-see stance at its September 19 meeting, although most experts still expect a 25-basis-point rate cut. Meanwhile, traders continue to monitor the court case over the legality of import tariffs introduced by President Donald Trump: yesterday, he stated that his team would appeal to the Supreme Court for an expedited ruling, arguing that lifting the tariffs could significantly pressure the national economy.

Eurozone

The euro forex is gaining against the yen and the US dollar, while showing mixed dynamics against the pound.

The positive trend is supported by August macroeconomic data: the eurozone services PMI fell from 51.0 to 50.5 versus forecasts of 50.7, but remained in expansion, while the composite index edged up from 50.9 to 51.0, slightly below the expected 51.1. In Germany, however, the indicators weakened: the services PMI dropped from 50.6 to 49.3 versus 50.1 expected, and the composite slipped from 50.6 to 50.5 against forecasts of 50.9. Overall, the data show stability, as the services slowdown is offset by strength in the industrial sector, while declining foreign demand for European goods is balanced by stronger domestic demand. The July producer price index eased from 0.8% to 0.4% month-over-month and from 0.6% to 0.2% year-over-year, increasing the likelihood that the European Central Bank (ECB) will refrain from adjusting borrowing costs in the near term.

United Kingdom

The pound is strengthening against the yen and the US dollar, while showing mixed performance against the euro.

Support comes from the services sector: August PMI rose from 51.8 to 54.2, beating the preliminary estimate of 53.6, while the composite index climbed from 51.5 to 53.5 versus the expected 53.0, supported by an increase in new orders. However, surveyed companies reported persistent concerns over high inflation, rising costs, and workforce reductions in non-manufacturing industries. Meanwhile, it was announced today that the new national budget will be presented on November 26. Investors expect it to include significant tax hikes, likely putting pressure on the UK economy.

Japan

The yen is weakening against the euro, the US dollar, and the pound.

The services PMI for August declined from 53.6 to 53.1, in line with forecasts, while the composite index rose from 51.6 to 52.0 versus the expected 51.9. Indicators are steadily recovering amid the strongest domestic order growth since February, although external demand continues to contract. Companies noted forced staff cuts, leading to slower production. Meanwhile, Bank of Japan Governor Kazuo Ueda reiterated the need for gradual currency adjustments based on fundamentals and confirmed close cooperation with the government, while Deputy Governor Ryozo Himino added that the goals behind the US Republican administration’s tariffs are political and social as well as economic.

Australia

The Australian dollar is strengthening against the US dollar, the euro, the pound, and the yen.

Support comes from Q2 GDP data: output grew 0.6% quarter-over-quarter, above expectations of 0.5%, and 1.8% year-over-year versus the forecast of 1.6%, marking the strongest pace in two years amid rising domestic demand and household spending. This reduces the likelihood of the Reserve Bank of Australia maintaining its dovish stance this year. In addition, the August services PMI accelerated from 54.1 to 56.8 versus the forecast of 55.1, while the composite index rose from 53.8 to 56.5.

Oil

Oil prices are correcting downward after Reuters sources reported that OPEC+ participants may consider increasing output at their next meeting, although many experts had expected a pause to assess energy demand following the end of the US summer driving season.

At 22:30 (GMT+2) today, investors await the weekly API petroleum report, with forecasts pointing to a –3.4 million barrel adjustment, which could help support crude prices.