US dollar slides as markets reprice US election expectations

Pound (GBP) muted as focus turns to BoE

The pound (GBP) traded in a narrow range through yesterday’s session as the dust continued to settle on last week’s budget.

Sterling was also subdued as GBP investors turned their focus to the Bank of England’s (BoE) interest rate decision on Thursday.

Coming up, this morning will see the publication of the UK’s latest services PMI. Could an upwards revision to October’s finalised figures provide a modest lift for the pound?

Euro (EUR) supported by USD weakness

The euro (EUR) trended broadly higher on Monday, with the single currency being underpinned by its strong negative correlation with the US dollar (USD).

Tempering these gains, however, was the release of the Eurozone’s latest manufacturing PMI, which despite being revised slightly higher confirmed the bloc’s factory sector remained in deep contraction last month.

In the absence of any notable Eurozone economic releases, the euro may struggle to find direction during today’s session.

US dollar (USD) slides amid US election jitters

The US dollar got off to a poor start this week, after a poll suggested that Kamala Harris has pulled ahead of Donald Trump in the US Presidential election.

A Trump victory is seen as positive for the US dollar as his economic policies are viewed as inflationary, which in turn may encourage the Federal Reserve to keep interest rates on higher for longer.

The US dollar is likely to remain sensitive to US political jitters as America goes to the polls today, which may see the currency remain on the defensive as USD investors err on the side of caution.

Canadian dollar (CAD) stable as oil prices rise

The Canadian dollar (CAD) traded sideways on Monday as a strong upswing in oil prices helped to offset the pressures stemming from CAD’s positive correlation with the US dollar.

If oil prices continue to climb, the ‘loonie’ may be able to build on this support during today’s session.

Australian dollar (AUD) firms following RBA rate decision

The Australian dollar (AUD) trended higher in overnight trade as the Reserve Bank of Australia (RBA) elected to keep interest rates on hold this month, while also ruling out any cuts for the foreseeable future.

New Zealand dollar (NZD) buoyed by cautious optimism

The New Zealand dollar (NZD) edged higher overnight on Monday, with the risk-sensitive currency being underpinned by an optimistic market mood.