Dollar ended mixed in choppy Monday trading. By early U.S. morning, the dollar declined broadly (except the Japanese yen) as reports showed that U.S. housing and manufacturing are improving, encouraging investors to be more risk-aggressive. U.S. construction spending increased by 0.8 % versus the expectation of a 0.2% drop, while U.S. ISM manufacturing came in at 55.7 in October, well above economists' forecast of 53.0 and previous month's reading of 52.6. However, Jon Greenlee's comments, associate director of the Fed's Division of Banking, eroded investors' risk appetite as he said that U.S. banks are at risk of sizeable new loan losses, particularly on commercial property and some banks may not have sufficient capital to fully cushion against setbacks. The U.S. major indexes surrendered the about 1% gain posted earlier on strong data, however, in late New York trading another rebound set in. DJI closed up 76.71 points.
Euro ended the day with a little changed against the dollar. In Asian morning, euro resumed the decline from last week's 14-month high of 1.5064 to 1.4681. Buying interest lifted the single currency partly due to active short-covering on the bounce in European stock markets. Euro then rose to as high as 1.4846 versus the dollar after the release of a batch of upbeat U.S. economic data. However, the pair later retreated again in New York afternoon before stabilising.
In Australia morning, news over the weekend regarding U.K. banks (such as Lloyds and RBS) was one of the factors behind cable's selloff to 1.6346. Although sterling rebounded to as high as 1.6480 partly due to Asian equities bounced off their lows (Shanghai compositive index managed to end up 2.7%), cross selling versus euro pushed cable lower to 1.6328 in New York morning as eur/gbp rose from 0.8955 to 0.9123 before another bounce is seen. U.K. CIPS manufacturing PMI data came in at 53.7 versus economists' forecast of 50.0.
Tuesday will be a holiday in Japan. Data to be released on Tuesday include Australia RBA rate decision, U.K. construction PMI, U.S. factory orders and revised durable goods orders.