Eurozone PMI and Currency Market Update

The HCOB Services Purchasing Managers’ Index (PMI) for the Eurozone came in at 51.3 in September, slightly lower than the expected 51.4. This PMI metric is important as it shows how well the service sector is performing. It was released around the same time as the US Nonfarm Payrolls report, which usually influences its reaction. In the currency market, GBP/JPY has stabilized near 198.00, reflecting a weak yen and signs of a slowdown in the UK PMI. The US ISM Services PMI is expected to show continued strength for September. At the same time, gold prices have remained above $3,850 due to the ongoing US government shutdown, with everyone keeping an eye on the ISM Services PMI results. Currency pairs like EUR/USD and GBP/USD have seen minor changes. EUR/USD fell to 1.1730, while GBP/USD held steady around 1.3450. Market movement has slowed ahead of Japan’s LDP vote. FXStreet highlights various brokers for currency and commodity trading in 2025, focusing on low spreads and high leverage. Readers are advised to do thorough research before investing, as trading carries significant risks. Today, we are also anticipating the US ISM Services PMI report, which is a significant event for the markets. Most expect the data to show resilience in the US economy. A strong report could strengthen the dollar, especially during the current US government shutdown. On the other hand, Eurozone services data, with a PMI of 51.3, signals slower growth. This difference between the US and Europe has been ongoing, similar to trends seen after the pandemic in the early 2020s. It may lead investors to prefer US assets over European ones.

Impact of the Government Shutdown on Gold

The government shutdown is a major factor behind gold trading firmly above $3,850 an ounce. This political instability drives investors toward safe havens, and we expect gold to stay strong until Congress reaches an agreement. During the last government shutdown that lasted 35 days in late 2018 and early 2019, gold prices rose significantly. Traders focusing on market volatility will view today’s PMI release as a key driver. We may see increased interest in options like straddles on the SPX, which enable traders to profit from big price changes in either direction. A surprising PMI result—much stronger or weaker than expected—could easily lead to such price movements. In currency markets, the yen remains weak, with GBP/JPY settling around 198.00. The upcoming Liberal Democratic Party vote in Japan adds to market uncertainty, making it sensible to bet on further yen depreciation. The Bank of Japan’s policies are much looser than those of other major banks, which has kept pressure on the yen for over three years. Lastly, while the Fed’s Goolsbee mentioned that the labor market is stable, today’s report will give us fresh insights. The employment data from the ISM report will be closely watched for any signs of weakness. If the report shows any softness in this area, it could shift expectations for interest rates and drive assets like gold even higher. Create your live VT Markets account and start trading now.

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