USD

The US dollar was able to get a boost from stronger than expected ISM manufacturing PMI for October, as the reading climbed from 56.2 to 56.4 instead of dipping to the consensus at 55.3. 

There are no reports due from the US today, as sentiment could drive price action. If risk appetite remains low, the US dollar could stay supported against its counterparts for the rest of the New York session. 

EUR

The euro was under heavy selling pressure at the end of last week, as ECB officials have hinted that a rate cut is in the cards. Euro zone banks were on a holiday last Friday but the selloff still continued and is likely to carry on for the rest of today’s trading session. For today, Spanish and Italian PMIs are up for release along with the manufacturing PMI for the euro zone region. Weaker than expected readings could lead the euro to suffer a deeper selloff in the London session. 

GBP

The pound gave way to dollar strength on Friday, as the UK manufacturing PMI dipped from 56.3 to 56.0 instead of holding steady for the month of October. The construction PMI is due today and it is expected to stay at 58.9 but another downside surprise might lead to pound weakness again. 

CHF USD/CHF climbed higher on Friday when Switzerland’s SVME PMI came in weaker than expected. The actual reading fell from 55.3 to 54.2 instead of improving to 55.4. There are no reports due from Switzerland today so it could be all about risk sentiment driving USD/CHF across the charts. The pair is already approaching a key resistance level and any change in sentiment could lead to a reversal in that area. 

JPY

The yen continued to gain against its counterparts since the lower-yielding currency was able to take advantage of strong Japanese data and the low-risk market environment. There were no reports released from Japan last Friday and there are none due today as Japanese banks are on holiday. With that, expect higher volatility among yen pairs and potential swings if risk appetite changes. 

Commodity Currencies (AUD, NZD, CAD)

The comdolls still chalked up some losses on Friday even though Australia reported a rise in quarterly producer prices and Chinese official manufacturing PMI came in line with expectations. Over the weekend, the non-manufacturing PMI of China showed an improvement and this might keep the Australian dollar supported for the rest of the day. Australia also printed a better than expected retail sales increase of 0.8% versus the estimated 0.5% uptick. There are no reports due from Canada or New Zealand for the rest of the trading day so risk sentiment could be crucial in determining where these currencies are headed. 

By Kate Curtis from Trader’s Way