European currencies, the Euro and the Pound experienced a significant fall in the trading of the European session yesterday driven by the published data showing the situation of economic activity in September which was less encouraging.
All manufacturing and service sector PMI data involving France, Germany and the UK show a 'red' reading, which is a decline compared to the previous month.
However, the European currency managed to recover a little in the New York session following the US dollar which began to weaken in reaction to the same PMI data for the United States (US).
The service sector remained as good as last month, but the manufacturing sector suffered a smaller decline than last month's updated month, missing expectations for an increase.
Indicators on the dollar index (DXY) remained at low levels after aggressive interest rate cuts by the Federal Reserve (Fed) at last week's meeting.
Investors this week will focus on views by Fed members after the decision on the policy easing.
Minneapolis Fed President Neel Kashkari expressed his support for the central bank's interest rate cut, seeing it as the right decision given the downward trend in US inflation and the risk of rising unemployment.
Meanwhile, Atlanta Fed President Raphael Bostic is open to further interest rate cuts in the near term.
With the expectation that the US dollar will continue to move under pressure, some more economic data will be watched towards the end of the week that will add to the turmoil for the currency such as the US economic growth data and the PCE price index.
Market focus today (Tuesday) is on the results of the Australian central bank (RBA) policy meeting with interest rates expected to be kept unchanged at 4.35%.
A follow-up speech by the governor will be watched before investors await Australian inflation data to be published on Wednesday.
In the New York session, US consumer confidence survey data is expected to influence the movement of the US dollar.
