Dollar shrugs off negative US data

Despite negative data coming out of the US, the US dollar managed to shrug this off as the markets main focus was on the interest rates around the world.

There was some good news as 3 month USD Libor slipped below the crucial 3% mark, which indicated that interbank lending had improved. However Manufacturing PMI came in at 38.9 from its previous 43.5, which is an indication that a sharp recession is on the books for the US. Due out today is Durable Goods Orders, expected at 0.8%; Factory Orders expected at -0.8% from its previous -4%. And the main news today is the US Presidential election.

The Euro also had negative data being released as speculation of them cutting rates on Thursday sent it towards the day's lows, with falls in oil not helping the currency. Due out today is PPI, expected at -0.1% from its previous 0.5%. 

The Sterling was under immense pressure yesterday as the rate decision on Thursday is looming on the currency. The focus on the UK economy sent EUR/GBP through the 0.80 mark and the US Dollar below the 1.60 mark once again. There is no data out of the UK today. 

Other news around the world showed Australia putting their interest rates down by 75 basis points instead of its expected 50 basis points, which showed little movement in the currency as it was close to expectations.