EUR/USD steady as PMI surveys highlight slowing growth, markets await Powell speech

• EUR/USD steady on Tuesday after PMI releases showed slowing momentum on both sides of the Atlantic.
• US S&P Global Composite PMI eased to 53.6 in September, below forecasts but still above 50.
• Traders eye Fed Chair Powell’s remarks at 16:35 GMT after cautious signals from Bowman and Goolsbee.

The Euro (EUR) is treading water against the US Dollar (USD) on Tuesday after preliminary Purchasing Managers Index (PMI) releases from both sides of the Atlantic showed slowing momentum, with EUR/USD steady as the Greenback holds firm on evidence that US private sector output continues to expand despite the loss of pace.

At the time of writing, EUR/USD is trading around 1.1800. Meanwhile, the US Dollar Index (DXY), which measures the Greenback's value against a basket of six major currencies, is hovering around 97.35. Traders showed limited reaction to the PMI data and are instead awaiting remarks from Federal Reserve (Fed) Chair Jerome Powell, scheduled for 16:35 GMT, for fresh monetary policy cues.

In the United States, the S&P Global Composite PMI eased to 53.6 in September’s preliminary reading, below the forecast and prior reading of 54.6, though it remained firmly above the 50 threshold. The Manufacturing PMI held steady at 52.0, matching expectations but easing from 53.0 in August, while the Services PMI came in at 53.9, in line with forecasts but down from 54.5 a month earlier. The numbers suggest the US private sector output is cooling, but continues to signal expansion.

Across the Atlantic, the Eurozone Composite PMI rose to 51.2 in September’s preliminary reading, slightly above expectations of 51.1 and higher than 51 in August. The Services PMI improved to 51.4, rising from 50.5 in August and beating expectations of 50.5. In contrast, the Manufacturing PMI slipped back into contraction, easing to 49.5, well below the forecast of 50.9 and down from 50.7 in August.

The Greenback also finds support from the Fed's cautious rhetoric. Vice Chair Michelle W. Bowman said Tuesday that last week’s quarter-point cut should be seen as a first step toward a more neutral stance, warning that the labor market could weaken rapidly and policy may need to adjust more quickly if risks materialize. Fed’s Austan Goolsbee added that while rates can come down if inflation trends toward the target, he is not considering 50-basis-point cuts, describing policy as only mildly restrictive and noting that neutral is likely 100-125 basis points below current levels.