US S&P Global Manufacturing PMI rises to 50.1 in January, Services PMI retreats to 52.8
Source Fxstreet
- The US private sector expanded at a softening pace in January.
- US Dollar Index stays deep in negative territory below 107.50.
The economic activity in the US' private sector continued to expand in January, albeit at a softer pace, with the S&P Global Composite PMI declining to 52.4 from 55.4 in December.
In the same period, the Manufacturing PMI improved to 50.1 from 49.4, surpassing the market expectation of 49.6. Finally, the Services PMI declined to 52.8 from 56.8.
Commenting on the survey's findings, "US businesses are starting 2025 in an upbeat mood on hopes that the new administration will help drive stronger economic growth," said Chris Williamson, Chief Business Economist at S&P Global Market Intelligence.
"Rising optimism is most notable in the manufacturing sector, where expectations of growth over the coming year have surged higher as factories await support from the new policies of the Trump administration, though service providers are also entering 2025 in good spirits," Williamson added.
Market reaction
The US Dollar (USD) stays under bearish pressure following the PMI data. At the time of press, the US Dollar Index was down 0.5% on the day at 107.57.
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus.
Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
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