Forex Today: US elections and RBA in focus as the US Dollar pulls back

What is in focus for markets on Tuesday, 3 November?

Pressure on the US Dollar (USD) persists as traders look past encouraging macroeconomic figures, including an October ISM Manufacturing PMI reading that beat forecasts. Geopolitical developments remain a key influence, with reports pointing to a potential breakthrough in US-Iran negotiations. Meanwhile, markets await the US mid-term election outcome, Factory Orders and the Job Openings and Labour Turnover Survey (JOLTS). At the time of writing, the US Dollar Index (DXY) stands at 101.72, a decline of 0.24%.

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How Is the US Dollar Performing Today?

Today's percentage movements in the US Dollar (USD) against the major currencies listed are presented 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 from the left-hand column and the quote currency from the top row. Selecting the US Dollar on the left and following that row across to the Japanese Yen, for instance, gives the percentage change for USD (base)/JPY (quote) in the corresponding cell.

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

Trading near 1.3400, the British Pound has been unable to maintain its upward momentum after GBP/USD touched a high of 1.3448. With no releases on the calendar, traders can continue factoring in a Bank of England (BoE) rate hike on Thursday. LSEG data puts the probability at close to 100%.

Following the Bank of Japan's (BoJ) dovish surprise last Friday, USD/JPY remains rangebound. Despite a moderately hawkish message, money markets anticipate higher interest rates at the December meeting.

A retreat to 0.7000 leaves AUD/USD awaiting the Reserve Bank of Australia (RBA) Interest Rate Decision at 03:30 GMT. Markets assign an 85% probability to the 25 bps rate hike investors expect. Alongside the policy decision and the RBA Monetary Policy Statement, attention will be on RBA Governor Bullock's press conference.

Without an obvious catalyst, USD/CHF stood out as the outperformer in the foreign exchange market, drawing investors' attention as it moved from around 0.8250 to 0.8182. Switzerland's October Consumer Price Index (CPI) release could guide the Swiss National Bank's (SNB) next steps. The SNB is expected to retain its monetary policy stance, with its interest rate among the lowest.

Reports of a potential resolution between Washington and Tehran triggered a sharp sell-off in West Texas Intermediate (WTI) crude. WTI has slumped more than 6.60% to $96.11, pressured by an Axios report that US President Trump would rather allow more time for diplomacy with Iran before weighing renewed 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, although a recovery is likely if buyers regain $4,000. Lower US Treasury yields have also helped lift the yellow metal to its current spot levels.