The dollar is adding to its recent gains against its major European competitors on Monday, but is pulling back against the Japanese Yen. The U.S. Presidential election will be held on Tuesday, bringing the close race between Barack Obama and Mitt Romney to a conclusion. The lack of a clear frontrunner has led investors to be cautious today.
Activity in the U.S. service sector expanded for the 34th consecutive month in October, according to a report released by the Institute for Supply Management on Monday, although the pace of growth slowed by more than economists had anticipated.
The ISM said its non-manufacturing index dipped to 54.2 in October from 55.1 in September, although a reading above 50 indicates continued growth in the service sector. Economists had expected the index to edge down to a reading of 54.9.
The Greek parliament is expected to vote on another round of austerity measures this week ahead of receiving aid.
The Italian economy will likely contract notably this year, before shrinking at a slower rate in 2013, as an improvement in external trade would be offset by a sharp reduction in domestic demand, a report from statistical office Istat said Monday.
Gross domestic product is seen falling 2.3 percent in the whole of 2012. Next year, the economy is forecast to shrink at a notably slower rate of 0.5 percent, which is slightly faster than the 0.2 percent contraction predicted earlier.
The dollar has been gaining ground against the Euro since it rebounded from a low of $1.3019 on Halloween. The U.S. currency reached nearly a 2-month high of $1.27.66 on Monday.
Confidence among Eurozone investors increased for a third month in a row in November, reflecting an improvement in their assessment of the current situation as well as expectations of future economic developments, data released by the think-tank Sentix showed Monday.
The Sentix Index rose to -18.8 in November from -22.2 in October and -23.2 in September. Economists had forecast an increase in the reading to -21.1.
Unemployment in Spain rose for a third consecutive month in October amid the country’s deepening recession and stringent austerity. The number of unemployed persons in Spain in October rose 2.73 percent month-on-month to 4.83 million. This figure was 10.84 percent higher than a year earlier.
German Chancellor Angela Merkel will travel to London on Wednesday for a working dinner with British Prime Minister David Cameron, following her address at the European Parliament in Brussels.
During her talks with Cameron, Merkel is likely touch upon issues surrounding the EU budget, after Cameron’s embarrassing defeat in the budget vote in Parliament last week.
The greenback also rebounded from a low of $1.6175 against the pound sterling on Halloween and has climbed to $1.5956 on Monday.
The U.K. services sector expanded just marginally in October raising concerns about the sustainability of the strong recovery seen in the third quarter.
The headline Purchasing Managers’ Index fell more-than-expected to 50.6 from 52.2 in September, survey data from Markit Economics and the Chartered Institute of Purchasing and Supply (CIPS) showed Monday.
The buck reached a 6-month high of Y80.672 against the Japanese Yen on Friday, but has pulled back to around Y80.250 on Monday.