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OCBC strategists Sim Moh Siong and Christopher Wong project USD/KRW at 1320 by end-2026 and 1260 by end-2027, implying a moderate Korean Won (KRW) appreciation path that is unlikely to be linear. High-beta characteristics, elevated US yields and potential further Fed hikes keep near-term volatility high, while resilient exports and strong AI-related semiconductor demand underpin a constructive medium-term view as USD strength moderates.

Won recovery but choppy path

"Recovery bias but unlikely a straight line. We expect KRW to appreciate moderately into 2027, with USD/KRW projected at 1320 at end-2026 and 1260 at end-2027. The recovery is unlikely to be a straight line, given KRW’s high-beta characteristics and sensitivity to global risk sentiment and portfolio flows."

"Korea’s export resilience and continued strength in AI-related semiconductor demand should provide support, while expectations for hawkish Fed repricing to unwind and USD strength to moderate reinforce our medium-term constructive bias."

"Near term, however, still-elevated US Treasury yields and expectations of another Fed hike could sustain two-way volatility, while resident overseas investment flows may continue to complicate KRW’s response to equity market strength."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Commerzbank’s Charlie Lay and Dr. Henry Hao highlight broad-based weakness in China’s October PMI data, with manufacturing, non-manufacturing and composite readings all falling into contraction territory. The disappointing figures reinforce the case for further policy support, as subdued domestic consumption and weaker export orders underscore the need for a meaningful fourth-quarter rebound to support the government's full-year growth target.

Weak China PMIs reinforce the case for policy support

"China’s economic activity lost ground in October, with all three official PMI gauges falling into contraction territory simultaneously. The manufacturing PMI dropped to 49.3 (Bloomberg consensus: 49.9) vs 50.1 in September, reversing the prior month’s brief return to expansion."

"The non-manufacturing PMI fell to 49.7 (Bloomberg consensus: 50.0) vs 50.2 previously, while the composite PMI slid to 49.7 from 50.7. The breadth of the miss, spanning both the goods and services sectors, signals a fragile recovery heading into the final quarter of the year."

"The across-the-board PMI miss reinforces the case for further policy support before year-end. With Q3 GDP at 4.5% yoy, the government’s full-year growth target remains within reach but requires a meaningful Q4 rebound."

"The weakness in new export orders adds complexity to the outlook, as policymakers cannot rely on external demand to compensate for still-subdued domestic consumption."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• EUR/USD holds modest gains as the US Dollar recovers from earlier lows.
• Positive US-Iran diplomatic headlines push Oil prices sharply lower.
• ECB policymaker Peter Kažimír signals that further interest rate hikes may be needed.

EUR/USD trades with a bullish bias on Monday but lacks upside momentum as the US Dollar (USD) trims part of its earlier decline, while traders assess fresh Middle East headlines that sent Oil prices tumbling. At the time of writing, the pair trades around 1.1200, up 0.37% on the day, after reaching a one-week high of 1.1237.

Iranian President Masoud Pezeshkian said the Supreme Leader had granted the government certain powers regarding negotiations, according to ISNA. On the US side, Axios reported that President Donald Trump favours giving diplomacy with Iran more time. West Texas Intermediate (WTI) trades near $96 a barrel, down more than 5% on the day.

The drop in Oil prices offers some relief from inflation concerns and keeps US Treasury yields on the back foot, which should limit the US Dollar’s upside. Markets also remain cautious before Tuesday’s US midterm elections. The US Dollar Index (DXY), which tracks the US currency against a basket of six major peers, trades around 101.70, off an intraday low of 101.44 but still down 0.25% on the day.

On the data front, the US ISM Manufacturing PMI rose to 55.5 in October from 54.5, beating expectations of 54.6. Meanwhile, the Prices Paid Index eased to 75.2 from 77.9, below the forecast of 77.0.

Focus also turns to Friday’s Nonfarm Payrolls (NFP) report, which could shape expectations for a December Fed rate hike, currently priced at a 74% probability, according to the CME FedWatch Tool. Policymakers remain open to further tightening to bring inflation back to the central bank’s 2% target, although a softer jobs report could temper those expectations.

Euro appeal muted even as ECB guidance and France rating offer support

Analysts at DBS Group Research caution that the Dollar’s recent loss of momentum “does not automatically create a compelling case for the EUR.” They argue that “Europe’s fiscal and political uncertainties, particularly in France, and its vulnerability to elevated energy prices complicate the search for viable alternatives” to the USD.

Nonetheless, DBS notes that the Euro “did find support from the European Central Bank providing clearer guidance than the Fed on the prospects of a December hike and Moody’s affirmation of France’s Aa3 sovereign debt rating,” tempering some of the region-specific concerns.

In the Eurozone, the final HCOB Manufacturing PMI came in at 52.7 in October, above the preliminary reading and expectations of 52.4. Meanwhile, ECB policymaker Peter Kažimír said on Monday, “The question is increasingly not if further ECB action is needed but how much.” He added, “Markets may still underestimate what path is required.” Reuters reported that traders anticipate two to three ECB rate hikes over the next year.

Brown Brothers Harriman’s (BBH) Elias Haddad notes that the US Dollar weakened alongside short-term Treasury yields as Fed Chair Kevin Warsh’s patient stance on inflation and concerns over slowing AI investment weighed on rate hike expectations. Attention now turns to upcoming US labor market data, including NFP, JOLTS and ADP, with steady hiring and easing wage growth potentially reinforcing the Fed’s gradual tightening approach and keeping the Dollar in check.

Data and politics steer Dollar outlook

"USD and short-term Treasury yields drifted lower last week as Fed Chair Kevin Warsh struck a patient tone despite stalled progress on US inflation. Concerns about an AI investment slowdown compounded the move, casting doubt on the US growth outlook and dampening Fed rate hike expectations."

"This week’s data is mixed for USD. Steady US hiring and slower wage growth would back Warsh’s gradual approach to rate hikes and keep USD in check."

"October nonfarm payrolls (NFP) (Friday). Consensus looks for a +65k rise in payrolls vs. +29k in September, consistent with stabilizing labor demand. The unemployment rate is expected to hold at 4.2%, a tick higher than the FOMC 2026 projection of 4.1%. Average hourly earnings are forecast to rise 0.3% m/m vs. 0.1% in September, and ease at an annual pace of 2.9% y/y vs. 3.0% in September."

"Slower wage growth underscores Warsh’s confidence that inflation compensation is going the right way. However, combined with sticky inflation, slower wage growth is also squeezing real household incomes, posing a downside risk to consumer spending."

"Ahead of the NFP, the September JOLTS report (Tuesday) should reinforce the labor market’s low hire, low fire backdrop. October ADP private payrolls (Wednesday) are forecast at +67k vs. +90k in September. October Revelio Labs employment (Thursday) has no consensus but rose 56.9k in September. Revelio may offer a better NFP signal, with a reported correlation coefficient of 0.74 vs. ADP’s 0.26 since 2010 and virtually zero year-to-date."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• GBP/USD gains 0.26% to 1.3423 as US Dollar weakness supports Sterling.
• WTI plunges over 5.60% despite stronger US manufacturing activity.
• BoE expected to raise rates to 4% as traders await NFP.

The Pound Sterling (GBP) rises about 0.26% against the US Dollar (USD) on Monday, starting the eleventh month of the year on an upbeat note as the economy in the US remains strong following the release of the ISM Manufacturing PMI for October. GBP/USD trades at 1.3423 at the time of writing after hitting a six-week high of 1.3448.

GBP/USD advances as plunging Oil prices weaken the Dollar ahead of BoE decision

The Institute for Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) improved from 54.5 to 55.5 in October, exceeding forecasts of 54.6. In the report, employment measurements cooled by a tenth, while Prices Paid dipped from 77.9 to 75.2.

The data was US dollar-positive, but renewed hopes for a diplomatic exit to the US-Iran conflict sent energy prices downwards, with West Texas Intermediate (WTI), the US Oil benchmark, falling more than 5% to $96.32. Consequently, the positive correlation between crude and the Greenback weighed on the latter, with the US Dollar Index (DXY), which tracks the value of the American currency against six other currencies, drifting lower by 0.27% to 101.68.

US Secretary of State Marco Rubio said that US President Donald Trump supports a diplomatic exit. Ahead, US mid-term elections would drive price action before investors focus on Friday’s Nonfarm Payrolls report.

In the UK, traders have digested the Autumn Budget and now brace for the Bank of England (BoE) monetary policy decision on Thursday.

The BoE is widely expected to raise rates by 25 basis points to 4% by the end of the year; money markets had priced a total of 33 bps of hikes, according to Prime Terminal.

This is Pound positive as the interest rate differential between the US and the UK will narrow. But if the BoE holds rates steady in December and the Fed raises rates as priced by market participants, this could cap the GBP/USD advance.

What’s in the calendar?

In the UK, the docket is absent. In the US, traders will eye Factory Orders and the Job Openings and Labor Turnover Survey (JOLTS).

GBP/USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3418, retaining a bullish near-term bias as it holds above the latest composite simple moving average cluster around 1.3376. The pair is also trading above former trend-line barriers, with the broken downward resistance from 1.3653 now providing support near 1.3387 and the earlier resistance line tied to the 1.3869 peak now underpinning price around 1.3244. A Relative Strength Index (14) reading near 59 suggests constructive but not overextended bullish momentum, reinforcing the idea of buyers remaining in control while upside remains gradually paced.

On the downside, immediate support is seen at the current price area around 1.3418, ahead of the trend-line support-turned-floor at 1.3387 and the simple moving average cluster near 1.3376, with a deeper cushion at the prior break zone around 1.3244. On the topside, GBP/USD would face next notable resistance at the rising support trend line broken near 1.3668, with a stronger cap emerging at the higher upward trend-line break around 1.3842, where sellers could attempt to reassert themselves.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

• Gold starts the week on a positive note as Oil prices fall amid renewed US-Iran diplomatic efforts.
• Persistent inflation concerns and hawkish Fed expectations continue to limit Gold's upside.
• XAU/USD's technical outlook remains bearish as the RSI approaches oversold territory.

Gold (XAU/USD) extends its recovery during American trading hours on Monday, supported by falling Oil prices following positive headlines on US-Iran talks. The metal regains ground after hitting a fresh yearly low of $3,870 on Friday and ending October down 6.87%. At the time of writing, XAU/USD trades around $3,953, up 2% on the day.

The latest gains come after Iranian President Masoud Pezeshkian said the Supreme Leader had granted the government certain powers regarding negotiations, according to ISNA.

West Texas Intermediate (WTI) slips toward $96 a barrel, down more than 5% on the day. The decline in Oil prices also keeps US Treasury yields and the US Dollar (USD) on the back foot following the recent technology-stock sell-off, providing additional support to Gold.

Iranian Foreign Minister Abbas Araghchi said consultations through Qatari and Pakistani mediators were “very intensive,” adding that Tehran had presented its terms and plan and that progress depended on Washington’s “political rationality.” He stressed that reopening the Strait of Hormuz remained conditional on the US accepting Iran’s demands, including ending its naval blockade and lifting sanctions.

Hawkish Fed outlook clouds Gold’s recovery

Gold now trades around 28% below its all-time high near $5,600 set in January. Since the US-Iran war began in late February, the metal has largely moved opposite to Oil, as elevated energy prices drove inflation higher and prompted central banks, particularly the Federal Reserve (Fed), to tighten monetary policy.

The Fed voted 10-2 to keep interest rates unchanged at 3.75%-4.00% in October, following September’s 25-basis-point (bps) increase, opting for a patient approach in its fight against inflation. Traders price in a 72% chance of a December rate hike, according to CME FedWatch.

Despite the pullback, Oil prices remain well above pre-war levels, keeping inflation risks in focus. Any setback in diplomatic efforts could send energy prices higher again, reinforcing expectations of tighter monetary policy and limiting Gold’s recovery.

On the data front, the US ISM Manufacturing PMI rose to 55.5 in October from 54.5, beating expectations of 54.6. The Prices Paid Index eased to 75.2 from 77.9, below the forecast of 77.

Attention now turns to the US midterm elections on November 3, which could influence the US Dollar and, in turn, Gold. Traders also face a busy economic calendar as they look for clues on the Fed’s interest rate path. JOLTS Job Openings are due Tuesday. ADP Employment Change and the ISM Services PMI are due Wednesday, ahead of Friday's Nonfarm Payrolls (NFP) report.

Technical analysis: Weak momentum keeps further losses on the table

On the daily chart, XAU/USD maintains a bearish outlook as it trades below the 21-day, 100-day and 200-day Simple Moving Averages (SMAs).

The Relative Strength Index (RSI) at 37 hovers just above oversold territory, while the Moving Average Convergence Divergence (MACD) remains below zero with a negative reading, which together hint that downside momentum is still dominant, even if the sell-off is becoming stretched.

On the upside, immediate resistance lies in the $3,950-$4,000 region, followed by the 21-day SMA at $4,092. Above there, the 100-day SMA at $4,210 and a higher horizontal barrier near $4,400 form a broader supply zone, before the 200-day SMA at $4,485 comes into play as a more distant structural ceiling.

On the downside, Gold remains vulnerable to further losses, with immediate support at Friday's yearly low of $3,870. A break below this level could pave the way for further declines.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Standard Chartered’s Christopher Graham analyzes upcoming changes at the European Central Bank following Christine Lagarde’s early departure. He highlights that half of the Executive Board, including Isabel Schnabel and Philip Lane, must be replaced. The report discusses potential successors such as Klaas Knot and Pablo Hernandez de Cos, and stresses that implications for monetary policy are more nuanced than a simple hawk-dove split.

Leadership reshuffle and policy thresholds

"Christine Lagarde’s announcement that she will step down as European Central Bank (ECB) president nine months ahead of schedule has accelerated what was already shaping up to be a major reshuffle of the Executive Board."

"Our marginal base case is that former Dutch central bank governor Klaas Knot will be the next ECB president, France will secure the chief economist role and Germany will replace Schnabel’s seat."

"The implications for monetary policy are more nuanced than a simple hawk-dove distinction."

"Relative to Lagarde, de Cos appears marginally more dovish and Knot marginally more hawkish, but both have demonstrated pragmatism, while the other appointments could matter just as much."

"With the ECB confronting renewed inflation pressures and potential sovereign stresses, the candidates’ thresholds for policy action could become apparent fairly quick."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• Silver gains over 3.5% as US-Iran diplomatic signals weigh on Oil prices.
• XAG/USD remains below key moving averages, keeping the bearish outlook intact.
• The RSI recovers from oversold territory, while the ADX points to a strong downtrend.

Silver (XAG/USD) attempts a rebound on Monday after sliding to a fresh yearly low of $48.47 on Friday. The recovery comes as Oil prices tumble more than 5% following positive diplomatic signals from both the US and Iran. At the time of writing, XAG/USD trades around $51, up 3.80% on the day.

Iranian President Masoud Pezeshkian said the Supreme Leader had granted the government certain powers regarding negotiations, according to ISNA. Earlier, Axios reported that US President Donald Trump favours giving diplomacy with Iran more time.

Falling Oil prices ease inflation concerns, allowing US Treasury yields to extend their recent decline following the technology-stock sell-off and adding pressure on the US Dollar (USD). Together, these moves support Silver’s recovery.

However, a deeper decline in Oil prices is far from assured, as the diplomatic outlook remains uncertain and both Washington and Tehran keep military options open. Silver’s upside therefore hinges on whether diplomacy leads to a sustained decline in Oil prices.

Otherwise, elevated energy costs could keep inflation risks in focus and the Federal Reserve (Fed) on a hawkish path. Higher interest rates increase the opportunity cost of holding Silver, which pays no yield.

Technical analysis

On the daily chart, XAG/USD maintains a bearish outlook as it trades below the 21-day Simple Moving Average (SMA) at $56, the 100-day SMA at $61 and the 200-day SMA at $70. This alignment of price under all major trend filters suggests the metal is in a broader corrective phase, while the Relative Strength Index (RSI) is hovering near 31 after briefly dipping into oversold territory.

The Moving Average Convergence Divergence (MACD) stays in negative territory with a weak line, and the rising Average Directional Index (ADX) near 42 suggests the prevailing downtrend retains strength despite the proximity of oversold momentum.

On the topside, initial resistance is seen at $52, ahead of a more notable barrier at $55, with the 21-day SMA at $56 reinforcing this supply zone and the 100-day SMA at $61 marking a deeper recovery hurdle before the prior horizontal cap at $67 and the longer-term 200-day SMA at $70.

On the downside, immediate support sits at Friday's low near $48.87, where a break would expose further bearish extension, although the increasingly oversold RSI and strong-trend ADX readings suggest that any slide towards that floor could start to attract short-covering rather than fresh aggressive selling.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Business activity in the United States (US) manufacturing sector expanded at an accelerating pace in October, with the Institute for Supply Management's Manufacturing Purchasing Managers' Index (PMI) rising to 55.5 in October from 54.5 in September. This print came in better than the market expectation of 54.6.

Other details of the report showed that the Employment Index edged lower to 52.4 in this period, while the Prices Paid Index, the inflation component, declined to 75.2 from 77.9.

Assessing the report's findings, "In October, US manufacturing activity remained in expansion territory. Of the five subindexes that make up the PMI, four (New Orders, Production, Supplier Deliveries and Inventories) grew faster than the previous month, while Employment growth slowed down by 0.3 percentage point," noted Susan Spence, Chair of the ISM Manufacturing Business Survey Committee.

"In October, general sentiment got worse for a third month in a row, with 34 percent of the comments positive and 66 percent negative (a 1-to-2 ratio of positive to negative sentiment)," Spence added. "Among negative comments, pricing volatility was mentioned in 62 percent, longer lead times 41 percent, tariffs 25 percent and the Iran war 21 percent; most comments mentioned multiple factors."

Market reaction

This report failed to trigger a noticeable market reaction. At the time of press, the US Dollar Index was down 0.35% on the day at 101.60.

Philip Wee at DBS Group Research notes that AUD has largely priced in a 25-bps RBA hike to 4.85% at the November meeting, following an acceleration in CPI inflation. He warns that the RBA could still disappoint by pausing or signalling a near-peak in rates, with downgraded GDP and higher inflation forecasts highlighting a difficult policy trade-off and a tentative AUD/USD recovery.

Australian Dollar faces RBA trade-offs

"The AUD has largely priced in a 25-bps hike to 4.85% at the November 3 Reserve Bank of Australia meeting."

"Although the three earlier hikes appear to be cooling the labour market, weak productivity growth continues to sustain inflationary pressures despite subdued consumption growth."

"The RBA could, nevertheless, disappoint by following the Reserve Bank of New Zealand’s surprise pause or by delivering a hike while signalling that rates are nearing peak."

"The RBA’s accompanying Statement on Monetary Policy will likely show 2027 forecasts revised lower for GDP growth and higher for inflation, underscoring the RBA’s difficult policy trade-off."

"AUD/USD’s recovery from 0.6894 to 0.7032 in the second half of October remains tentative, with the USD also likely to determine if it can break last week’s peak at 0.7068."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)