2nd Nov 2026 14:28
(Alliance News) - The dollar was stronger against major counterparts on Monday, while the euro firmed and the pound was mixed as observers prepare for the Bank of England's rate call later in the week.
The US ISM manufacturing purchasing managers' index is due out later in the afternoon. It is "expected to see improving activity levels," Exness Senior Financial Markets Strategist Dat Tong said.
The dollar index fell to 101.60 points, from 102.06 on Friday.
"Markets still price a 25-basis-point Federal Reserve interest rate hike in December, but have scaled back the number of increases expected through mid-2027, eroding part of the currency's support," Tong commented. "Renewed doubts over the returns on investment in AI have boosted demand for treasuries, keeping yields subdued and placing pressure on the US dollar."
Against the dollar, the Swiss franc rose to USD1.2199 from USD1.2124.
The dollar rose against the yen to JPY157.77 from JPY157.23.
Against the Australian dollar, the greenback rose to AUD1.4282 from AUD1.4247.
Against its Canadian counterpart, the US dollar firmed to CAD1.3980 from CAD1.3975. Canada's manufacturing PMI release is also out on Monday.
Sterling rose to USD1.3414 from USD1.3381.
Against the euro, however, the pound slipped to EUR1.1955 from EUR1.2010.
"While markets have taken the [UK government's autumn budget last week] in stride, the lack of action to tackle welfare spending or clarity on defence spending means that we are left with more questions than answers," Ebury Chief Economist Enrique Diaz-Alvarez. "The pound, however, has edged higher against both the dollar and the euro as we head into Thursday’s BoE decision.
"We expect the MPC to raise rates, a move that is almost fully priced in, given resilient growth and stubbornly high inflation. The vote split and the guidance will matter more for the pound than the decision itself. We expect a split vote and open-ended guidance...Market expectations of three more hikes after this week's meeting strike us as overly aggressive, and we expect the MPC to push back against them."
The euro also strengthened to USD1.1214 from USD1.1142.
Eurozone factory sector growth slowed by less than expected in October, survey results from S&P Global showed.
The manufacturing PMI edged down to 52.7 points in October from 52.9 points in September, beating the flash reading of a sharper fall to 52.4 points and remaining above the neutral 50-point mark separating growth from contraction.
The manufacturing PMI output index declined to a four-month low of 52.8 points in October from 53.6 points in September, easily beating the flash reading of a worse fall to 52.4 points. The expansion was "solid" despite slower new order growth and increased supply-chain pressures, S&P Global said.
Meanwhile in the UK, the seasonally adjusted manufacturing PMI rose to a five-month high of 52.8 points in October, in line with the flash estimate and up from 51.9 in September.
"UK manufacturing showed resilience in the lead-up to the autumn budget," commented S&P Global Market Intelligence Director Rob Dobson.
By Emma Curzon, Alliance News reporter
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