Forex Today: US elections and RBA in focus as US Dollar weakens

3 November, Tuesday: Key Market Developments

The US Dollar Index (DXY) is down 0.24% at 101.72 at the time of writing. Strong macroeconomic figures have failed to support the US Dollar (USD), with markets looking past an above-forecast October ISM Manufacturing PMI. Geopolitical developments dominate attention as reports point to a possible breakthrough in US-Iran negotiations. Traders also await the US mid-term election results, Factory Orders and the Job Openings and Labour Turnover Survey (JOLTS).

0.49% Against AUD: US Dollar Performance Today

Today's percentage moves in the US Dollar (USD) against the major currencies listed appear in the table below. The Australian Dollar was the currency against which the US Dollar performed best.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.33%	-0.16%	0.21%	0.10%	0.49%	0.19%	-0.88%
EUR	0.33%		0.18%	0.53%	0.42%	0.82%	0.52%	-0.52%
GBP	0.16%	-0.18%		0.38%	0.25%	0.63%	0.33%	-0.70%
JPY	-0.21%	-0.53%	-0.38%		-0.09%	0.29%	-0.00%	-1.07%
CAD	-0.10%	-0.42%	-0.25%	0.09%		0.40%	0.09%	-0.95%
AUD	-0.49%	-0.82%	-0.63%	-0.29%	-0.40%		-0.29%	-1.34%
NZD	-0.19%	-0.52%	-0.33%	0.00%	-0.09%	0.29%		-1.03%
CHF	0.88%	0.52%	0.70%	1.07%	0.95%	1.34%	1.03%

Percentage movements between major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. Selecting the US Dollar on the left and following its row across to the Japanese Yen, for instance, gives the percentage change for USD (base)/JPY (quote).

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

A 0.33% gain looks likely for EUR/USD at Monday's close, with the pair still below 1.1200. HCOB PMIs were robust in Spain and Germany, but Italy's reading fell short of forecasts, dropping from 50.4 to 49.4 into contraction. Speeches from European Central Bank (ECB) officials Joachim Nagel and Olaf Sleijpen will draw investor attention on Tuesday.

After touching 1.3448, GBP/USD lost upward momentum as buyers failed to extend the advance, leaving the British Pound trading near 1.3400. With no releases on the calendar, traders can continue factoring in a Bank of England (BoE) rate increase on Thursday. LSEG data puts the probability close to 100%.

Following the Bank of Japan (BoJ)'s unexpectedly dovish turn last Friday, USD/JPY is moving within a sideways range. Money markets anticipate higher interest rates at the December meeting, although the message was moderately hawkish.

Ahead of the Reserve Bank of Australia (RBA) Interest Rate Decision at 03:30 GMT, AUD/USD fell to 0.7000. Investors assign an 85% probability to a 25 bps rate increase. Alongside the monetary policy decision and publication of the RBA Monetary Policy Statement, markets await RBA Governor Bullock's press conference.

Investors took note as USD/CHF moved from around 0.8250 to 0.8182, making it the FX market's outperformer despite the absence of a clear catalyst. Switzerland's October Consumer Price Index (CPI) release could shape the pace of policy at the Swiss National Bank (SNB). The bank is expected to retain its currency policy stance, with interest rates among the lowest.

Reports of a potential resolution between Washington and Tehran triggered a sharp sell-off in West Texas Intermediate (WTI) crude. Down more than 6.60% at $96.11, WTI is under pressure after Axios reported that US President Trump favours allowing more time for diplomacy with Iran before considering fresh strikes.

Broad US Dollar weakness has supported Gold (XAU/USD), given its positive correlation with WTI, putting the metal on course for a rise of more than 1.50% to $3,964 per troy ounce. Market structure nevertheless points to a continuing overall downtrend. A recovery is likely if buyers regain $4,000. Lower US Treasury yields have also helped lift the precious metal to its current spot price.