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Eurozone data to weigh on the euro?
The euro could be ‘one to watch’ in Tuesday session as traders look ahead to release of manufacturing and services sector data as a barometer of the Eurozone’s economic health.
The manufacturing purchasing managers’ index for the currency area is expected to show a slight decline to 57.8 for October, a decline from a reading of 58.1 in the previous month. Manufacturing rose at its fastest rate in over six years in September.
Economists forecast services activity in the 19-member currency bloc to remain steady at 55.6.
An index level below 50 denotes contraction in the sector, while a level above 50 signals an improvement.
The duo of reports come just a few days ahead of the European Central Bank policy meeting on Thursday amid growing expectations that the central bank will announce plans to begin trimming its massive monetary stimulus programme.
EUR/USD fell 0.29% to $1.1749.
US macro data on tap
Market participants look ahead to the release of a pair of economic reports due Tuesday, which may offer further guidance on the strength of U.S. economy, ahead of U.S. GDP data slated for Friday.
A preliminary reading of non-manufacturing economic activity for October is expected show a steady growth in the sector. Economists expect a reading of 55.6 for the month, up from 53.1 in the previous month.
The manufacturing purchasing managers' Index (PMI) meanwhile is expected to show a continued improvement from an earlier slump in August after Hurricanes Harvey disrupted weighed on output.
Ahead of Friday’s GDP data, the dollar has tacked on gains against its rivals, on signs of progress on tax reform and growing investor expectations the Federal Reserve will raise rates for the third time this year in December.
Gold’s rebound to continue?
The dollar gave up some of its gains Monday, prompting a sharp rebound in gold futures as the precious metal ended the session in positive territory.
Market participants are expected to closely monitor moves in gold prices amid recent comments from analysts warning that the precious metal looks set to deepen its retreat in the coming days as global central banks seek to tighten monetary policy.
“We expect the metal to drift lower in the coming days, unless key resistance around the $1,295-$1,300 area gives way first, in which case out bearish view would be invalidated. A return to the bottom of the channel around $1250 would not come as major surprise to us,” said Fawad Razaqzada, market analyst at Forex.com, in a note.