Web Trader MT5
The PMI is one of the most closely watched pulse-checks of an economy, and it comes straight from the people running businesses. Each month, purchasing managers at a large sample of companies are surveyed on things like new orders, output, employment, and supplier deliveries, and the answers are boiled into a single number.
The magic is in one threshold: a reading above 50 means the sector is expanding, below 50 means it is contracting. Because it is timely and forward-looking, the PMI often moves markets before the official hard data ever arrives.
Example: A closely watched manufacturing PMI drops from 51 to 48, tipping from expansion into contraction. Traders may interpret it as an early warning that the economy is slowing, and some may respond by selling the currency and pricing in a greater chance of interest-rate cuts, depending on market expectations and other economic data.
