The franc and euro lead into London; the Australian dollar trails ahead of the RBA
The Swiss franc leads the major currencies this morning, with the euro second and the Australian dollar last. The dollar and yen are also near the bottom. That split matters: Friday’s 3.46% Nasdaq 100 sell-off still hangs over the session, but FX is showing little sign of a broad move into defensive currencies. US equity futures have recovered some ground, and crude has eased as Qatar-mediated talks with Iran continue. Reports of possible US strikes after Tuesday’s midterms remain unconfirmed.
Europe. The euro was already gaining before the morning releases. The final euro-area manufacturing PMI came in at 52.7, above the 52.4 expected but still below September’s 52.9. That tempers the slowdown; it doesn’t reverse it. The more important policy signal came from the ECB’s Peter Kažimír, who said markets may still underestimate how much tightening is needed. That is one policymaker’s view, but with EUR already outperforming CAD and GBP this morning, there’s little to confirm the weekly bearish euro view yet. Sterling is firmer too, though the UK manufacturing PMI landed exactly as expected at 52.8, giving markets little new reason to reprice Thursday’s BoE decision.
Australia. AUD is the weakest currency on the eight-hour chart even with roughly 85% odds of an RBA hike on Tuesday. The domestic manufacturing survey helps explain the policy dilemma: the index held at 49.6, new orders fell at their fastest pace since December 2024, yet input cost inflation picked up. China offers no clear offset: its official manufacturing PMI fell to 49.3 while the private RatingDog survey rose to 52.0. With a hike already widely expected, the question for AUD is whether the RBA sees enough persistent inflation to signal another one. NZD, meanwhile, has moved into positive territory this morning; last week’s selling hasn’t carried straight into Monday.
Oil and CAD. The pullback in crude leaves CAD without the same support it had late last week. OPEC+ kept December production targets unchanged, so the immediate swing factor is news from the Gulf. Progress in talks could take more of the risk premium out of oil. A confirmed disruption to shipments would carry considerably more weight than another report that strikes are being considered.
Next up: US ISM manufacturing at 15:00 UTC. Fed officials Logan and Musalem argued for further hikes, but the dollar has struggled to hold its early gains. Watch new orders alongside prices paid: stronger orders and firmer prices would make a different case for tightening than rising costs alongside weaker demand. For the USD outlook, the useful confirmation would be a rise in short-dated US yields relative to peers that the dollar can hold across several pairs.