On Tuesday, the US dollar (USD) declined to new lows against other major currencies. This came about despite the release of positive data from the country. It seems that investors are remaining cautious ahead of the monthly policy decision from the Federal Reserve which will take place today. Also, investors are now cautious after the FBI said on Friday that they would be investigating emails from the private server of Hillary Clinton. This sparked more uncertainty regarding her election prospects ahead of the vote which will take place on the 8th of November.
According to the Institute for Supply Management (ISM), last month, the manufacturing PMI (purchasing manager’s index) increased to 51.9, up from a reading of 51.5 in September. For October, analysts had expected the index to rise to 51.7. The EUR/USD traded higher at 1.1043, up 0.57%, marking its highest level since the 14th of October.
In other currency news, the British pound (GBP) held steady, trading at 1.2242 against the US dollar. The currency failed to react to the data released by Markit which showed that for the month of October, the UK manufacturing PMI came in at 54.3, down slightly from 55.4 in September and missing analysts’ expectations for a reading of 54.5.
Meanwhile, on Tuesday, at the conclusion of its policy meeting, the Bank of Japan did not unveil fresh stimulus measures, despite a warning on the inflation outlook. As a result, the USD/JPY traded lower at 104.54, down 0.29 percent. Also, in a widely expected move, the RBA (Reserve Bank of Australia) left its benchmark interest rate unchanged at 1.50%.
The Canadian dollar also held strong against the USD and the USD/CAD traded at 1.3396, down 0.10%, pulling away the 7-month high of 1.3432 which it reached on Friday. The CAD was supported by strong economic data after Statistics Canada reported that, in August, the economy expanded 0.2%.
Today, investors will shift their focus to the Fed rate review expected later in the day as well as Crude Oil Inventories also expected out of the US.