The US dollar eased despite stronger macro data, after October’s ISM Manufacturing PMI beat forecasts but failed to lift sentiment. Geopolitical headlines took centre stage on talk of progress in US-Iran negotiations, while markets also weighed the looming US mid-term elections alongside Factory Orders and the Job Openings and Labor Turnover Survey (JOLTS). The US Dollar Index (DXY) was at 101.72, down 0.24%. In Europe, EUR/USD was up 0.33% but held below 1.1200; Spain and Germany printed solid HCOB PMIs, while Italy’s reading slipped into contraction to 49.4 from 50.4, undershooting expectations. Focus then turns to comments from ECB officials Joachim Nagel and Olaf Sleijpen.
G10 Currencies And Central Bank Expectations
Sterling traded near 1.3400 after GBP/USD topped out at 1.3448, as markets continued to price a Bank of England (BoE) hike on Thursday with odds near 100% per LSEG. USD/JPY moved sideways after last Friday’s dovish surprise from the Bank of Japan (BoJ), even as money markets still look for higher rates in December. AUD/USD fell to 0.7000 ahead of the Reserve Bank of Australia (RBA) decision at 03:30 GMT, with an expected 25 bps rise priced at 85%, and attention on the Monetary Policy Statement and Governor Bullock. USD/CHF strengthened, with the pair moving from around 0.8250 to 0.8182; Switzerland’s October CPI may shape expectations for the Swiss National Bank (SNB), seen maintaining one of the lowest interest-rate settings.
Commodities And Market Sentiment
WTI slid more than 6.60% to $96.11 on diplomacy rumours, while gold rose over 1.50% to $3,964 per troy ounce as the dollar weakened and Treasury yields fell.
